Denver Housing Market Update | January 2023
Let’s talk numbers and compare them to the years prior.
Then we’ll talk about real estate market predictions for the Denver metro area.
And then let’s talk about what this means for you.
Denver Housing Market Update
The biggest impact on the Denver housing market last year was the interest rates rising so quickly in a very short amount of time.
The second impact, which came from the uncertainty of the rising interest rates was new listings. We saw a significant drop in inventory, we were down 20% from 2022. Sellers decided they were not going to sell the house they had at an amazingly low-interest rate to purchase at a 6+ interest rate.
2022 started out at a 30-year interest rate of about 3% and ended at just under 6.5%.
When you hear the media say the market is down, I want you to understand what is down and what is up and what is normal in the ups and downs.
Fewer homes sold last year than we’ve seen in the past 4 years.
- In 2022 we sold almost 51,000 homes
- In 2021 and 2020 we sold in the 60,000s.
- In 2019 and 2018 we sold over 56,000.
Fewer homes came on the market in 2022 than in the prior 4 years.
- 2022 we had a little over 60,000
- 2021 was over 66,000
- 2020 was over 69,000
- 2019 over 71,000
- 2018 over 68,000
The December average price was almost $638,000 – down 2.7% from November. That’s down from the height of the year, which was April when we the average price was just over $721,000. This seasonal differentiation in price change was higher than usual but it is normal to have the differentiation.
Our yearly average price is up – almost $681,000. That is up 11% over last year and we were up 16.7% from the year prior before that it was almost 8% and if we look at 2019 vs 2018 the increase was 2.8%.
Days on the Market are up. In December our average was 43 days. That is up from November and last year. This is a big indicator of going to a more normal market. Our buyers are analyzing everything before making an offer.
If we look at our yearly average days on market for 2022 they are 18. That is less than in 2022, 2019, and 2018. In 2019 they were 31 and 26 in 2018.
You might hear the media say that Colorado is in the top states that are having price drops!! Oh MY! But check this out…
In December homes closed at 98.38% of the list price. 2022 year-end close price vs. list price is 102.33%. What does this mean? This means buyers are still waiting for price drops before making an offer. Potentially putting them in a position to have to negotiate against another buyer instead of making the offer when the buyers and the agents think the house is overpriced. My suggestion is to make the offer instead of waiting for any kind of competition.
Denver Real Estate Inventory Comparisons
In 2022 we ended with over 4,700 properties on the market. That is more than 2021 and 2020 combined but less than 2019 and 2018. Both were over 5,000 properties on the market.
Housing Predictions 2023 in Denver
This will be important to remember.
Interest rates are going to still play a role in many segments of the market. We have been told to expect another rise in rates and then a dip and then they will probably even out. Rates between 5.5 and 6.5 percent for a 30-year will be normal again.
As you all feel more comfortable with the less volatile interest rates we will ease back into normal years of 3-5% appreciation per year.
Right now the average person or couple or family lives in the house for 10 years. That 3-5% appreciation will be ok in the long run.
Affordability will be our biggest challenge, especially for 1st time and middle-income buyers.
Remember people will still move, we grow up, we fall in love, we have babies, we get promotions, we divorce and we die. Houses will continue to sell.
Will home prices drop in 2023 in the Denver Metro area?
You will hear the media saying that Denver will see price declines. I invite you to work with me so we can look at your target price range and area.
Some home prices will drop from last year or last month and some will continue to rise, but not at the rates we saw in the past 2 years.
Once interest rates stabilize the inventory in a neighborhood and prices will drop, will stay flat, or rise. If inventory increases prices will flatten and then drop. If inventory drops, prices will rise.
Now let’s get to the most “real” part of what you need to know for your next move.
Every person’s reason to move is different. Some will have to move some will get to move.
Each neighborhood is going to be different. Some will be a buyers’ market some will be a sellers’ market and that will fluctuate this year.
We’ve had across-the-board seller’s markets for years.
Buyers, you have asked the market to slow down, you want more choices, and the time has come. I believe we will see more homes come on the market after the Superbowl and as the winter thaws out.
Find Your Dream Home
Are you thinking it is time?
Each price range is different. If you hear something hasn’t’ sold in 45 days you need to ask, what price range and what neighborhood. We cannot compare an $800,000 condo in downtown Denver to a $300,000,000 house in Washington Park.
Sellers, you want to be sure to price correctly, and communicating weekly with your real estate agent will be important. I would like to earn your business.
Love the Way you List
Thinking about selling your property?
I want you to be able to make a decision to move in confidence and that is why I make these videos. Please share this article with a friend and message me so that we can plan for your next move.