The May Market
It’s been a wild first quarter of 2023 in real estate. Colorado’s economy is performing stronger than most of the country so the “doom and gloom” we are hearing about doesn’t hold as much truth in the Rocky Mountains. This is good news for the overall health of our economy and real estate market! Real estate is resilient over time. This graph shows closing and listings over time since 2008. We are still nowhere close to the excess inventory problem during that time. In fact, the opposite is true.
Mortgage rates have settled in the mid 6’s and financial experts believe they will stick there for a couple of years. The shock of the initial rate hike is wearing off and homebuyers are out! Buyers are being much more picky than last year - homes are on the market for 3x as long. They don’t have the same money to make updates they did in 2020 and 2021. Inflation was slightly lower in March than anticipated.
Listings are currently seeing about 15 showings before they go under contract. With about 4 showings per property per week, it could take 3+ weeks to go under contract, even for those perfect move-in ready homes. The odds of selling are up at 65%. We continue to see homes fall out of contract and come back on the market due to job losses and lending issues for buyers.
We continue to see an inventory problem with 30% fewer new listings on the market this year compared to last year. Folks who bought in the past few years don’t want to give up their amazingly low-interest rates unless they really have to move. We wrapped up April with just about 4500 homes for sale in all of Denver metro at all price points! With low inventory we are still seeing multiple offers on homes, closing over list price, and the “perfect” homes in the “perfect” neighborhoods are going under contract quickly.
There are hotter and cooler areas, though. LoDo has cooled significantly in the last year while other areas like Aurora and Castle Rock pick up with new construction.
May is a busy month but starts to slow down in real estate. We have a lot of holidays from Cinco de Mayo to Mother’s Day and Memorial Day. Then it’s graduations, kids out of school, and summer family trips. It all contributes to the typical summer “cooling” of the market while the weather warms up!
