Denver Metro Area Real Estate Market Review
As the season changes, so does the real estate market. There are several key factors to this market shift and the results are not surprising. The primary catalyst is interest rates. As the Federal Reserve raises interest rates, fewer buyers enter the market. There is a higher proportion of first-time home buyers entering the market, but that isn’t necessarily a good statistic. Rising interest rates means fewer first-time home buyers will attempt qualifying for loans, knowing that they won’t be able to afford payments on a home in the right area.
This brings us to our second catalyst for the shifting markets: fewer buyers in general. Let’s take a look at what these shifting catalysts mean for the Denver Metro Area Real Estate Market.
Denver Metro Area
The most blaring indicators of the health of our real estate market over the last year have been month-end inventory, closings, and median home value. Over the last 6 months or so, we’ve been at historic low inventory levels. We’re now seeing higher inventory levels. April ended with 45% more inventory than March, and almost 24% more listings than last year. Closings, however, look very different. This is typically seen as the selling season, but compared to last year, and the years prior, closings were down 12%. This is helping lead to the increase month-end inventory. Even though sales are slowing and interest rates are rising, the median price of homes is still growing 4% month-over-month, 19% year-over-year. The median cost of homes is now $625,000 throughout the Denver Metro Area.
Like always, Boulder County is its own animal in the Denver Metro Real Estate Market. Inventory remains low, but so do closings. This means competition is hot in Boulder County. When a home sells in Boulder, they’re closing at an average of 11% over list price! With the median sales price just over $867,000, those offers are reaching $100,000 over list price often! As we continue to watch interest rates rise, homebuyers are trying to secure these million-dollar homes before it becomes too costly. In Boulder County, home prices are still rising 11% month-over-month, 18% year-over-year.
Thanks in large part to our proximity to the city of Boulder, we’re seeing amazing growth. The median sales price of homes in Longmont is now $630,000, which is a staggering 21% growth over last year, and around 8% over last month. Homes are selling just about as fast as last year, staying on the market for an average of 12 days. We’re still seeing low inventory numbers, even as the selling season comes into full swing. What does come on the market sells above list price at an average of 8% over list price. It is still very competitive in Longmont, but there are rays of hope for homebuyers in the area.
According to the Denver Metro Association of Realtors, “there is minimal financial incentive to move” right now, and this may be affecting inventory levels along with rising prices and interest rates. Within the past few years individuals have refinanced their mortgages and potentially done renovations. Home prices are growing almost 20% year-over year. Interest rates on mortgages are north of 5%, and are slated to rise even more. Homebuyers are rushing to get into their dream homes before they become out of financial reach. This is pushing buyers into smaller communities in search of the perfect abode, and continues to push prices higher with bids higher than asking price.
When you are ready to dive into the real estate market, whether it’s to buy or sell, get in touch with The Wise Team. We’ll help you prepare for the journey. Things move fast these days, and we’re prepared for the hustle.