Denver Market is Normalizing and Spring Selling Season is Heating Up
The pandemic threw many markets into turmoil. Everything from the Nasdaq to the price of eggs, almost everything was way down or way up. Housing prices soared to unsustainable heights and have therefore settled back down a bit – just like the price of lumber. That is why SOME year-over-year statistics are so dramatically “bad”: median price down 6%, new listings down 16%, etc. Keep in mind as you review the SMDRA stats these are year over year, not all negative numbers are bad and not all positive numbers are good. Good or bad depends on which side of the transaction you’re on at the moment, buyer or seller. And some “big changes” are hardly impactful at all. For example, the Days On Market went from only 7 last year to 11 this year. If you apply percentages to that, it went up a whopping 57% increase! But if you really think about it and analyze the data, a house being sold in just 7 OR 11 days… both simply means it’s a VERY favorable market for sellers. Anytime houses are selling in less than 60 days is a historical sellers market. Similarly, a balanced market has 6 months of inventory, so for us to go from 1 week of inventory to 4 weeks of inventory this year is actually a healthy thing. Last spring people were routinely presenting offers for $50k or more over asking and completely covering appraisal gaps. Long term this was unhealthy and unsustainable.
Now that we’re beyond the pandemic roller coaster, the month-over-month statistics tell a much clearer story…
Comparing February 2023 to March 2023:
+ Active Inventory (houses available to look at and offer on): Up 19.5% which is better for buyers but still fine for sellers because we’re still selling so high and fast. Remember, in our population we need well over 20,000 listings for a balanced market between buyer and seller and we’re still under just 5,000 active listings. Still a sellers market.
+ Average Close Price: Up 1.44% to $665k showing increased health in the upper half of the market. A stable growth year is 4%, so one month increase of 1.44% is actually incredibly good.
+ Median Close Price: Up 0.44% to $565k showing a healthier, more stable growth rate and an indicator we’re creeping into the spring selling season. My crystal ball is in the shop but I predict this growth to continue through the fall.
The good news is that the market is stabilizing after a very tumultuous couple of years. Denver’s 7-county area is still a seller’s market but buyers aren’t having to throw everything and the kitchen sink at the offers. Most homes are still closing within 1 or 2 percent of their list price, either direction, depending on how aggressively priced they were to begin with.
So, is it a good time to buy or sell? Well, that depends on a lot of factors. Best to CONTACT US for a free 1-hour consultation to discuss your specific situation and make that determination. We have successfully assisted 7 clients first quarter this year (several with both selling and buying) and would love to help you get where you want to go too!