With Colorado’s slow transition into autumn started, we will notice the housing market changing as well. We saw drops in most categories last month, including a 4.39% reduction in the average close price in the Denver Metro Area. As fall approaches, Buyers will be more patient and have more options, and Sellers may need to take a second look at pricing their homes for sale. It’s difficult to predict how the housing market will look in a few months, but higher interest rates will continue to curb the housing demand as these rates directly correlate to monthly payments.
For the fifth month in a row active inventory in the Denver Metro area has risen. Pair that with a 3.33% average close price reduction last month and we are showing more signs of a potential buyer’s market on the horizon. Prices are still up 11% year-over-year, but this is promising news for those looking to find their home here in Denver. The market is normalizing.
June marks another month with a large increase in active inventory, another great sign for buyers looking for better options to fit their families needs. Per the Denver Metro Association of REALTORS® Market Trends Report, “At the end of June 2021, Denver Metro ended with 3,122 properties on the market. It has now almost doubled that amount over the year, with a total of 6,057 properties currently sitting on the market.” Prices have remained relatively consistent the last couple of months as well, due to the increasing mortgage rates – however, rates dropped by an entire half percent in the last two weeks.
Last month we saw active inventory shoot up 13.98%, a welcome sight for many weary buyers. Due to increasing mortgage rates, the Denver Metro Area saw an average and median close price reduction, if only slightly. Unfortunately, it’s still a very tough market for buyers – not only in terms of competition, but in the actual cost of housing here in Colorado. According to NAR’s Chief Economist Lawrence Yun, purchasing a home now is 55% more expensive than it was a year ago.
The sun is out, the birds are singing – it’s been a welcome relief. I hope everyone has had a chance to go out and enjoy the beautiful scenery that Colorado has to offer. As seasons change, the housing market makes its shifts as well. We saw a sharp spike in inventory last month, however prices continued to rise. It should be a busy Spring and Summer ahead!
Spring is right around the corner and will be such a welcome sight after a cold and muddy past few weeks. With the promise of longer and warmer days, the housing market will start its annual warming as well. Just last month we saw a 3.55% increase in inventory, a +5.36% increase in closed homes, and drop in average days in MLS. Average and median close price also sharply increased, although this is also an expected change as we head towards a robust Spring and busy Summer.
PMI, or Private Mortgage Insurance, is financial protection for your lender that is typically required by larger financial institutions for home loans where down payments are less than 20%. This cost is often built into your monthly payments. Once your home equity hits 20% of your home purchase price, you may be eligible to remove PMI insurance from your mortgage altogether. While your PMI may disappear automatically in some circumstances, as detailed in this Forbes article, there are a few ways in which you can quicken this process.
2021 saw interest rates remain low and buyer demand stay high. We saw many records broken last year and 2022 could be more of the same. At the start of 2022 the Denver metro area only had 1,477 active properties on the market, 11,175 fewer houses than normal. According to the Colorado Association of REALTORS® Housing Report, the Denver Metro Area had only 0.5 months supply of inventory at the end of November 2021, meaning that if homes sold at the current rate and no new houses went on the market, we would run out of homes to sell in half a month. Historically, the metro area hovers around 2 full months of inventory.
We saw a sharp decrease in month-end active inventory from October to November, dropping to 2,248 (including both attached and single-family homes). Despite the low inventory, we are still seeing a large amount of homes close as we transition from Fall to Winter, so while inventory is low, there are still plenty of houses listed each day and many opportunities to find yourself the home you’ve been looking for. November broke more than a few records, including Average Close Price (Residential: $629,479 – November 2020 was $545,031), Median Days in MLS (5 days, previous record low November was in 2020 at 6 days), and Months of Inventory (Residential: 0.46 months, compared to November 2020 at 0.71 months).
t finally feels like Fall here in Denver! While I think we all enjoyed the extended Summer the past few weeks, it’s been nice to feel a cooler breeze each day. As I’ve mentioned many times before, this cool down affects the housing market each year as well. Inventory and closings all dropped between September and October, an expected change that will continue into Winter, and we also saw average closing prices level. With prices remaining relatively consistent and days on market rising, this is an excellent time for buyers to hop back into the market and feel less pressure to find their dream home.