June 15th 2024.
According to the latest market trends report from the Colorado Association of Realtors, there has been a significant increase in new home listings statewide in May, with a nearly 24% rise compared to the same time in 2023. This has brought about a more balanced housing market, as stated by Denver-area realtor Cooper Thayer, who notes that over the past decade, the Denver area has typically had around 1.5 to 2 months of inventory, indicating a moderate seller's market. However, in 2022, the market shifted drastically to an extreme seller's market, with only two weeks of inventory available.
Thayer goes on to explain that for the first time in almost a decade, the Denver market has experienced 3.3 months of inventory, thanks to over 1,700 new listings hitting the market. This has resulted in only 1,013 sales closing in the same month. Thayer believes that this level of inventory is a clear indication that the market is now in a more balanced state, which is a significant change from the previous decade.
In this new balanced market, both buyers and sellers have equal negotiating power, according to Thayer. He notes that sellers are now more willing to provide concessions to assist buyers with interest rate buydowns, while buyers are responding with higher offers. Aurora-area realtor Sunny Banka adds that with more options available, homes are spending more time on the market, giving buyers a chance to make a more informed decision before rushing to make an offer.
The spring selling season has been slow in most markets statewide, as buyers are waiting for interest rates to drop. This has led many realtors to wonder if the market will continue to struggle. Kelly Moye, a realtor in Boulder, believes that with interest rates remaining high and the upcoming election causing uncertainty, many buyers have decided to wait it out.
Despite the slower-than-expected sales, the median prices for single-family properties continue to rise. In fact, statewide, the median home price increased by 4% in the last month compared to May of 2023. Realtors had predicted that the market would improve with the increase in available homes, but this has not been the case. According to Patrick Muldoon, a realtor in Colorado Springs, the truth is that the cost of housing is still too high, especially in the median price points.
The rising home prices, along with high interest rates and increasing property taxes and insurance premiums, are making it difficult for potential buyers to enter the market. Thayer notes that since 2018, Colorado homeowners have seen a staggering 57% increase in insurance premiums, which only adds to the affordability challenges, particularly for first-time homebuyers. However, he remains hopeful that as inflation rates continue to decelerate, there may be a chance for entry-level housing to become more attainable for new homebuyers.
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