Higher interest rates combined with a typical seasonal decrease in homes for sale continue to slow the Denver housing market.
According to the November market report from the Denver Metro Association of Realtors (DMAR), mortgage rates have more than doubled since January. DMAR reported that October and November logged the highest 30-year fixed interest rates in 22 years. Rates were 7.37% on October 20th and 7.29% on November 4th.
This has resulted in homes taking longer to sell. The number of days a home stayed on the market in November rose 20% from October, to 36 days. This is a 140% increase over the time it took for homes to sell in November of 2021.
“Interest rates affect a buyer’s ability to afford a home, and as a result, buyers are taking more time to evaluate the value of each home, indicating the buyers are more discerning,” noted Libby Levinson-Katz, chair of the DMAR Market Trends Committee.
Meanwhile, inventory dropped, as is typical of this time of year, adding to the market slowdown. The number of single-family homes listed for sale in November decreased 14.22% from October, to 6,253. The historical average drop in listings from October to November is slightly less: 12.83%.
Experts are uncertain what the near future will bring. “Without a doubt, the Denver Metro housing market is changing, but the question on everyone’s mind is how long this change will last and what to expect next year,” said Levinson-Katz. “…Ultimately, the spring market will be the best indicator of what the New Year will have in store for us…”
In the meantime, the DMAR suggests sellers price their homes with care. In November, those who priced their homes realistically fared far better than those aiming high. Homes that sold at the initial list price stayed on the market an average of 46, while properties that underwent price drops took significantly longer —an average of 87 days— to sell.
Despite the overall slowdown, Levinson-Katz noted that the market “continues to exhibit stability as showcased in the data this month.” For example, November prices remained nearly the same as in previous months. The average cost of a single-family residential property was $657,610, only .20% lower in November than October. Median price was $565,000, just .55% lower than in October.
“While we expect to see the Denver real estate market continue to change through 2023 due to interest rates and inventory woes, it continues to show strength and stability,” noted Levinson-Katz.