Patience is a virtue in the Denver housing market, according to the Denver Metro Association of Realtors Market Trends Committee.
With historically low inventory, buyers are biding their time waiting for new properties to hit the market.
We have been eagerly waiting to see how the spring market would perform and unfortunately, inventory remains extremely tight as homes go off the market almost as quickly as they become available. New listings dropped 6.71 percent month-over-month to 4,758, a decline of 30.94 percent year-over-year. Pending sales increased 10.51 percent month-over-month to 4,489, while active listings at month-end rose slightly to 4,620 properties. Median days in MLS dropped from 10 days to sev-en, showcasing how quickly the market is moving again. As reported in our Digging Deeper report, 87 of the 90 metro zip codes saw a significant increase in days in the MLS for the first quarter of the year.
Traditionally, at this time in the spring selling season, we see an increase in both active listings at month-end as well as new listings. The sluggish movement in these categories leaves a lot to be desired. The market segments with the largest jump in inventory are the detached segments of the Luxury and Signature Markets, with over a 4.5 percent gain.
The median price rose from $566,000 in March to $580,000 in April, which is considerably lower than the median price of $617,000 this time last year. As we know, last year was a different story when bidding wars were the norm with prices escalating in some cases over 10 percent above the list price, resulting in a 106.87 close-price-to-list-price ratio. Thankfully, this escalation calmed down with a 100.21 close-price-to-list-price ratio, showcasing more stabilized pricing.
The inventory decline in an already tight market raises some concern as to what the rest of the year has in store for the Denver market. Unfortunately, affordability took a hit with the rollout of tax assessments the last week of April, reflecting sizable increases to property tax bills across the state. The state average is 33 percent; however, some areas increased by more than 60 percent. Higher tax bills, coupled with increased interest rates, are going to have a significant impact on buyers' ability to purchase throughout the state, specifically the Denver Metro area.
The real question on everyone's mind is: when will more inventory hit the market? One answer might be investors divesting themselves of properties. There are a number of tenant-friendly bills up for vote in the legislature which has resulted in some clients of mine heading to the market. House Bill 1115, which would have lifted that statewide prohibition on rental control, was killed last week, but there are more bills that have landlords looking at selling.
It remains to be seen what the spring market has in store for us, but I do hope we see more inventory soon.
Learn more about the market from the Denver Metro Association of Realtors.
Keep reading for an expert opinion on the Luxury Market from West + Main Agent Nick DiPasquale.
Thank you to our partners at the Denver Metro Association of Realtors for compiling this information.
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
