Is there Stabilization in our Future?
We asked last month “Is this a Blip or Flip?” Well, the answer is: it’s looking like a Blip. Interest rates went into overdrive again and buyer applications for new mortgages visited a low not seen since 1995. The voracious activity we saw in January and early February has come to a halt thanks to interest rates going from high 5’s to 7% in 3 weeks’ time. Buyers and Sellers are looking for stability in economic data and we think that stability is in volatility, at least in terms of interest rates for the near term. Rates will fluctuate pending the inflation data that comes out monthly until that number begins to trend downward, month over month. Until we see that trend take hold the Denver real estate market will remain a little choppy. We will have months with more inventory and less buyers and months with more buyers with less inventory. Once we enter the late spring early summer selling season the hope is that the Market will begin to stabilize further because interest rates are predicted to come back down and stay there.
Home Prices Stabilizing?
Even with all this movement, we are seeing the housing market stabilize somewhat. Year over year home prices are starting to show some depreciation in certain areas, but month over month we are seeing prices moving higher (minimally) as well. Interest Rates are keeping prices from rocketing upward while the inventory shortage is keeping them from rocketing downward offering homeowners, sellers, and buyers some stability in the market. What we see in the actual market is that homes in great shape (ready for market) and in decent locations are selling quicker and for more money. Buyers are no longer tolerant at all of properties that are not prepared well for the market, taken care of, or priced inaccurately. Period.
February 2023 Housing Market Update
Active Inventory: 3,778 (↓) 8.30%
Closed Sales: 2,661 (↑) 22.51%
Average Closed Price: $657,921 (↑) 5.23%
Days on Market: 48 (↑) 4.35%
(Stats reflected here are MoM January to February)
The numbers for last month are not a surprise to anyone in the market. Sellers, buyers, lenders, and agents were all in agreement that something had changed from October, November and December. Clearly that reprieve came from a drop in interest rates that stuck around for a couple of months. We want to add that the luxury market was moving extremely fast with many competitive offers. There did not seem to be a stronger area over another for those price points. We did see luxury inventory that had been sitting for months (more than several) disappear in a matter of weeks.
The See-Saw will Continue
The statistics for March when they come out will show a slower pace for sure at most price points. Even those buyer’s that have been approved are now struggling with lower inventory and higher rates again and have slowed their roll when submitting offers. The Real Estate Market see-saw will bring good and bad news over the next couple of months. We will keep working our way through it and keep you up to date on what we are experiencing day to day. What we do know is that predictions will be shot down, headlines will be sensationalized, and people will still need housing.
If you know anyone that is thinking of buying or selling a home, please keep us in mind. We love referrals and you have our word we will take great care and provide great service to them as we have to you!
Data represents Attached and Detached Homes in the 7 county metro area.
We would like to thank DMAR for information and statistics used in crafting this article.