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.
Active inventory jumped 10% in September, and with more homes on the market, buyers have more options available to them. Average days on the market also increased to 13 days, signifying that buyers also have a little more time to make their decisions. While promising, Denver’s housing market is still incredibly competitive and buyer’s should remain vigilant and aggressive. Although the number of closed homes was down 12% last month, a significant number of homes went under contract as well. As seasons change, the market will continue to cool slightly and allow more buyers to enter the market – but it’s not time to relax just yet.
While inventory dropped 20% between April to May, we’ve seen a 50% increase in active inventory between May to June, up to 3,122 at months end. The number of closed homes has also risen about 10% month over month. Both of these statistics are typical of the Summer months, where we see a larger number of homes on the market at a slightly higher price point. This increase in inventory and price usually lasts until about August or September, where we see inventory begin to decline again. 2020 and 2021 have been unusual years, however, so it’s unclear how typical of a pattern we will see this Summer season. Regardless, there will be a lot of homes hitting the market in the next few weeks, so if you are still looking for a home and need an experienced REALTOR® on your side, I would be happy to help!