Market Update for your the start of 2024!
- Denver Metro home shoppers saw a boost in inventory levels in January as sellers brought 3,414 fresh listings to the market, 17% more than last January and nearly twice as many as we saw in December.
- At the close of December, there were 167% more home listings actively available for sale as compared to last year at this time. o Home affordability will likely remain a challenge for buyers in 2024.
- The Denver metro area kicked off the year with a notable uptick in buyer activity with 3,271 contracts executed on homes, 6% more than last year and 42% more than last month.
- Median home prices saw their biggest gains since April of 2023 thanks to strong performance in the luxury market. The number of closings of homes priced at $1M or more was up 20% from last January.
- Sellers are continuing to test the market as they price their homes for sale. At the same time, buyers are pushing back. In January, 48% of homes sold at less than original list price. The average price decrease was $21,000. At the close of the month, approximately 40% homes actively for sale reflected an updated asking price that was lower than the original list price.
With the data report that the number of closed real estate transactions in the 8 county Denver Metro area decreased by 34% over the last two years finishing up 2023, you would think prices are in the process of going down, however, there are three reasons prices will not drop in 2024:
- Homeowners who are deciding to sell in 2024 have an equity position at a much greater amount than past downturns in the market like in 2009-2011. This means sellers have more staying power to hold their prices and are reluctant to reduce their equity position very much because they can hold the home longer due to underlying low interest rates.
- Because of this Positive Equity Position for sellers, if a homeowner has an urgent need to sell, they can position their home at 5% below the current market and obtain a quick sale. Prices are stable because even sellers who have a more urgent need to sell, can easily find a buyer if positioned properly due to low inventories. 2024 Inventory for February is similar to 2023. This may raise over the spring and summer, but right now the low inventory will hold prices for sellers.
- Buyers are seeing that to get into a home in 2024, they can ask the sellers for some concessions to help with the sale. When a seller offers attractive concessions the prices of homes tend to rise over those home not offering concessions. Hence, the homes that do sell, are getting top dollar for their homes due to the sellers willingness to buy the rate down or credit buyers for repair items. The terms hold the prices or even have them go up.
Overall, the Denver marketplace will not see home prices drop in 2024, unless some unforeseen national or international impact.
All Data Taken from ReColorado 2.15.24.
