Denver Metro Real Estate Market Review
Talk about a sudden shift! Spring arrives with recent changes from the Federal Reserve and increased interest rates. Now we see a shift in the real estate market. Inventory is still low when compared to the last decade, but we’re seeing an increase month-over-month. This could be the start of the spring selling season, but it feels a little different this year. Let’s talk about why that is.
Denver Metro Area
As a whole, the Denver Metro real estate market kept pace with last year’s sales volume. Closings, however, were down 12% from last year. This means home values have grown tremendously over the last twelve months – a whopping 20.5%. That brought the median sales price of homes in the metro area to $602,750. These numbers make the Denver real estate market look like a popular metropolitan area, and that is true. Colorado is the sixth fastest growing state in the nation, according to Metro Denver EDC. With the low number of houses on the market up till now, and an ever increasing population, competition continues to be high, even as prices rise over 20% year-over-year. There is a glimmer of hope for buyers on a budget, though. As interest rates continue to rise and sellers enter the market in 2022, the buying ferver may lessen allowing room for negotiations. We have not seen this yet, however. The close-to-list-price ratio is continuing to grow, with buyers bidding an average of 6.5% higher than list price. This is a clear sign that buyers want to buy now.
Boulder county is telling a slightly different story than the rest of the Denver Metro Area real estate market. This is typically the time of year when we see the Luxury market (homes around 1 million dollars) come into full swing. The average price of homes sold has one again, for the second time in two years, reached over one million dollars! This happened for the first time in our recorded history last year, and has reached this milestone yet again in March. Even as the average sales price of homes continues to climb, we have noticed a slowing down of the market in a different way. Almost 31% fewer homes went under contract in March, with a 36% decrease in active inventory by month-end. As inventory continues to remain low, the purchase-to-list-price ratio is up to 109% in Boulder. Even so, they’re still selling extremely fast for Boulder. In 2021, homes stayed on the market an average of 32 days in Boulder. That number is now down to 14, and holding strong there.
Longmont is still a very competitive market. Prices are rising just as fast as the rest of the Denver Metro Real area with the same stories of low inventory and high purchase-to-list-price ratio. 77% of homes sold over their list price in March, with under 1% of listed properties accepting offers below list price. This statistic is amazing – something we haven’t seen in Longmont for years. Normally we’re excited about months reaching 40% of homes selling over list price. Last year we saw nearly 80% of homes accept offers over list price. We are currently seeing the purchase-to-list-price ratio in Longmont at 107.5%. That is 3.6 percentage points higher than last year’s ratio. This has pushed the median price of houses sold to $585,000, breaking our record set back in May of 2021.
What does this mean for you? If you’re selling in Longmont, you’re probably excited about the prospect of selling quickly and getting what you want. Buyers, on the other hand, are a little worried. Watching prices rise might make you question your ability to find what you want. Our best advice is to buy now. Get your loan secured and give The Wise Team a call. We’ll help you find the perfect place for you!
The Denver Metro Association of Realtors are saying, “there is no time to wait to buy,” and that many first-time home buyers are considering exiting the real estate market before they can buy. Mortgage interest rates continue to inch higher, and are already a full percentage point over last year’s rate. The Federal Reserve is continuing to raise interest rates in an effort to cull inflation and other market woes. This will more than likely increase mortgage interest rates in the immediate future. If you are looking to buy, get your mortgage secured now. Waiting will likely increase your payments or shift your expectations when house hunting. Give The Wise Team a call today. We’ll start your real estate journey on the right foot!