The Current State of Denver Real Estate - May 18, 2024
In April of 2024, the Greater Metro Denver real estate market saw a slight increase in properties going under contract, year over year, at a rate of 4.6%. However, closings were completely flat from 2023, despite the fact that the number of new listings increased by 26.8% to a level of 5,771 for the month of April. So despite nearly 1,000 new listings over last year, the number of under contracts only inched up, while the number of closings remained flat. In other words, as a percentage of active listings, sales are down substantially. With Mother’s Day weekend and the rainy weather, last week was impacted more than anticipated. However, it appears that showings have increased this last week. Interest rates are staying relatively steady, but are still in the low 7’s% for a 30-year Conventional loan. The rates on an FHA loan are around 6.75%. What is interesting, is that despite more inventory, the median sales price is continuing to increase, year over year. Anecdotally, it appears the lower end of the market is still getting competitive offers over asking and some of the million-plus homes are also still in demand and increasing. However, the mid-range properties from $600,000 to $1,000,000 do seem to be holding steady, if not coming down in price. As with all things, depending on the condition, location and price, that price point does appear to receive around 2% to 3% less than list price.
What still is directly affecting the housing market, is the cumulative effect of persistent inflation. Since January of 2021 the Consumer Price Index (CPI) is up, but Americans’ purchasing power is down, by 19%. For basic necessities, the situation is even worse. Groceries are up 21%. Gasoline prices are up 47%. The cost of shelter 20%, and electricity almost 30%. Another sector that directly affects affordability for homes, is homeowner’s insurance and property taxes. Those two items, especially in the Denver Metro area have in some instances increased over 50%, depending on the County and type of property you have. According to recent government statistics, a typical American family must pay $12,000 more per year simply to maintain their standard of living. You may not have control over those factors, but you can control where and how you live. Depending on your financial position, it may be time to consider down-sizing, or if you are 62 or over, using the equity in your home to purchase or refinance a new home using a Home Equity Conversion Mortgage to reduce or eliminate your monthly payments. We at the Tucker Team, are available to discuss your housing options by helping you determine the current value of your home and provide you with other housing solutions. We are here to help.