More Inventory, More Activity in Denver Real Estate
April was another busy spring month for Denver real estate, though it did close with quite a bit of inventory still available for May buyers. Looking at both detached and attached properties, month-over-month data showed a healthy increase in new listings and a bump in pending sales. However, closed sales came in 4.79% lower than 2023, and active listings at the end of the month soared by 51.30% year-over-year.
While these conditions might reflect market slowing due to today's interest rates, the Fed held rates steady in March and plans to reduce them at some point this year. It does appear that homeowners who purchased or refinanced at much lower rates are removing their "golden handcuffs" and entering the market as sellers. Thus, the supply of new listings is infusing the market with more inventory.
New listings for the market as a whole came in 21.22% higher month-over-month and 25.42% year-over-year. Looking closer, new listings of detached, single-family homes increased from 3,484 in March to 4,371 in April, a jump of 25.46%. They also increased by 11.04% month-over-month in the attached segment (condos and townhomes).
While demand remains strong and days on market decreased month-over-month, there are just a lot of homes for Denver buyers to sort through and choose from right now. Smartly priced, move-in ready homes are selling quickly and even receiving multiple offers. Not-so-turnkey homes are sitting longer and likely make up a good chunk of the active inventory going into May.
Speaking of active listings, the remaining inventory of single-family homes at the end of the month, came in 44.89% higher compared to April of 2023. Attached properties increased by 66.62% year-over-year.
Now, let's see how the rest of the numbers shook out last month.
While new listings of detached, single-family homes increased, buyers went under contract on 3,383 homes, an 11.14% increase over March and 12.99% higher than in 2023. However, closed sales only increased by less than a percentage point compared to the prior month and year-over-year. Another reflection of today's more normalized market.
The average number of days on the market decreased again to 28 which is a significant, 30% drop compared to the prior month and 6.67% below the average DOM for 2023.
Last month's uptick in activity being balanced by more inventory led to an increase in home prices but not by a lot. April's median price of $665,000 was just 3.10% higher than $645,000 in March and a normal, healthy 3.91% higher year-over-year.
And, while active listings are on the rise, the Denver market remains well under the 6-months of inventory needed to create a balanced market between buyers and sellers. For detached homes in the $500k-$749,999 range, there's currently just 1.46 months of inventory. Luxury properties $2M and over reached 4.32 MOI.
The attached market remains one area where buyers have leverage despite inventory remaining well below that 6-month supply benchmark. Again, new listings were way up, but pending sales only inched up by 0.37% compared to March and fell by 12.50% year-over-year. Closed sales were also down 18.16% YoY.
As for the median price, it was relatively flat versus the prior month, coming in at $419,000, and only increased by 2.20% compared to 2023. This could be where buyers might find a good bargain as the busy season continues.
Summing all of this up, Libby Levinson-Katz, Chair of the DMAR Market Trends Committee, had this to say:
"Inventory will continue to climb through May, so pricing conservatively has never been more important. Buyers on the hunt for their next property will likely choose the one priced at fair market value, with very little work needed. This is not the time to push the price or to place a home on the market to see if you can obtain the price you hope to achieve."
With the spring market in full swing and conditions varying depending on side, it's always best to work with an experienced real estate agent who can better assess the market and provide a smart strategy, as well as negotiate and advocate on your behalf. A proven professional will have the expertise, connections and resources to help you achieve your real estate goals. Choose your agent wisely.
Today’s Real Estate Market Explained
It’s no secret that the real estate market has shifted. However, news hype can create a bit of confusion about what’s really going on. Here’s what you need to know.
Today’s Market Is Normalizing. Past speculation that the market would crash did not come to fruition. However, over the last two years, mortgage rates increased sharply which slowed an unsustainable market pace. Now:
- The Federal Open Market Committee has opted to maintain the current fed funds interest rate instead of increasing or decreasing it.
- Accordingly, mortgage rates have eased but remain higher than when the Fed lowered rates to stimulate the economy during the pandemic.
- In response, the real estate market has eased up. It’s taking longer to sell and buyers are adjusting their budgets and expectations.
Market Conditions Are More Balanced. Typically, a six-month supply of homes for sale is considered a balanced market. While Denver and Boulder remain under that figure, the slower pace is creating more motivated sellers.
- Buyers can now take time to find the right home at the right price. But not too long.
- Along with pricing conservatively, sellers are often more open to negotiations and offering concessions such as mortgage rate buydowns.
- Well-priced homes in popular areas are still selling quickly and with multiple offers.
Higher Interest Rates or Higher Prices? It’s no secret that today’s higher interest rates are a big hurdle. However, this doesn’t necessarily mean that you’ll be paying more.
- Not that long ago, many buyers could not “win” bidding wars because the competition was so fierce. On average, homes were going for 25% or more over the asking price.
- In addition, buyers often waived inspections and other protections that left them paying for costly repairs on their homes.
- Some also paid cash for an appraisal gap and put down non-refundable earnest money which made it costly to get out of a contract if serious issues came up along the way.
Is Now a Good Time to Buy? Consider that in today’s market, buyers have more time to search, and the opportunity to get a well-priced home, complete with an inspection and possibly seller concessions. More reasons:
- You've found the right house and can afford it comfortably—that includes having about six months of money saved in an emergency fund.
- Your credit score is high and your debt-to-income ratio is low. These are two major factors when it comes to qualifying for a mortgage with the best rate and terms.
- You plan on staying in the home for a long time. Historically, equity is gained slowly and steadily with national appreciation values averaging around 3.5-3.8% annually.
- You understand that you can potentially refinance to a lower rate down the road.
