What an end to an interesting year in the Denver Metro Area real estate market. 2023 will be a year to study, with mortgage rate increases, new laws for short-term rentals, and a general shift in the buyer’s market mentality. Many speculators worried that 2023 would be the beginning of a downward spiral in the housing market, and therefore the overall American economy, but we haven’t (and aren’t) seeing that trend replicate into reality. At least not on any measurable wide scale amount. Let’s look at how December’s real estate market ended for Denver and its surrounding suburbs.
Denver Metro Area
Overall, the Denver Metro Area Real Estate Market looks healthy leaving 2023. Housing prices basically stayed the same year-over-year, with a marginal decrease year-to-date. The median sales price of homes in December ended just over $593,000. This is a 2.9% increase over December of 2022. The year-end median sales price for single-family homes in Denver ended at $612,000. Looking over the entirety of 2022, this is a decrease of 2.1%. Overall, not a bad statistic when considering we’ve had years of constant increases in home valuations.
Some of the more concerning statistics are the average days on market, total homes under contract, and the affordability index. The average days a home can predict being listed is sitting around 50 days. This is up 6.4% from last year. The year-to-date average days on market rose to 36, which is a 71.4% increase from last year. We can clearly see that homes are not moving as fast as pre-pandemic, pandemic, nor post-pandemic time periods, indicative of hesitant or fewer buyers in the market. The total number of homes that went under contract fell 15% in 2023. With homes sitting on the market longer, and fewer homes going under contract, we would assume this is a buyer’s market. It is true that sellers are working closely with lenders and real estate agents to build contracts that benefit both parties, but I wouldn’t describe this as a buyer’s market. The affordability index fell to 51 in 2023, indicating that the cost of homes and living in the Denver Metro Area has increased since December 2022.
Boulder County
Boulder County saw quite a different trend in December. It would appear a lot of sellers had high motivation to sell their properties by the end of the year. Median sales prices dropped over 3% from 2022, bringing the median home price to around $775,000. Homes were sitting on the market in Boulder County an average of 76 days by the end of the year. This may explain why homes were selling at a lower price, and with a 2.6% decrease (on average) in the list price received. Obviously negotiations were happening all throughout the county to move inventory because there was a 46% increase of contracts since last year.
The distressing statistics about Boulder County’s real estate market really center around the days on market and total number of homes sold. With the median sales price year-to-date decreasing 2.9% in the county, down to $825,000 after years of increases, it’s hard to find ready buyers with high mortgage rates. As the days on market continue to rise with the increased home valuations, more negotiations are finding their way into the contracts, including Buyers Rate Buydowns.
Longmont
We probably saw one of the larger decreases in home sales prices in the northern Denver Metro area. The median sales price dropped 7.18% in December, down to $543,000. This drop coincided with a steep increase in average days on the market, rising from 48 days to 64 (a 33% increase). It’s clear to see the benefit of home valuation in Longmont is no longer outweighing the proximity to Denver, Boulder, or Fort Collins and other factors of an inflationary economy. Longmont has seen a lot of new-builds, including apartments and condos, which may be more appealing to buyers with the persisting high mortgage rates.
Though these numbers seem troubling for a healthy real estate market, it’s actually a really good sign for future buyers. Longmont will be one of the more stable markets, hovering consistently at home prices from $350,000 – $550,000 moving forward. This will be good for first-time homebuyers, individuals looking to move out of high mortgage rates in the future, or families looking to expand while living in a stable community. Comparing these prices to the city of Boulder and the immediate surrounding areas, and the city of Denver and most of its immediate suburbs, make Longmont very appealing. The economic factors of 2023 don’t appear to be shifting much in 2024, but prices in Boulder and Denver continue to rise. Longmont, however, will continue to be a bastion of affordable homes, housing, transportation, and community focused businesses.
Already 2024 is starting off fairly slow, which is typical of winter months. The Federal Reserve appears to be ready to keep rates where they are. Buyers continue to feel the pinch of an economy with inflating prices. Sellers are sitting on their homes as valuations continue to creep up slowly. The spring will be an interesting time, as sellers begin listing their properties. I’m predicting the market will be a very strong buyer’s market, with lots of room for negotiations to get the contracts underway.
When you’re ready to consider purchasing a new home in Longmont, Colorado get in touch with the #1 realtor in town: The Wise Team.
