Housing & Supply Constraints driving Price:
A year ago, the Denver market was a “hyper” selling experience at almost every price. iBuyers, like Zillow, began to retreat when Zillow put 7000 homes on the market nationally. Zillow’s exit was barely noticed in markets like Denver – supply was easily absorbed. Last year Denver only had approximately 2500 homes for resale available at any one time. Rates were at 3.17%. Days on market were between 5 to 12 days for many price points.
Over the past 6 months, The Federal Reserve’s dramatic interest rate move has worked – mostly. Builders and speculators are in caution mode. The days to resell are closer to 30 days for most price points. In October, according to Bloomberg, national contracts for new builds rose 7.5% – a forward-looking economic indicator.
DENVER’s RESALE MARKET:
Today, Denver’s market remains a seller’s market. Local news would have you believe otherwise. Their comparisons skew year-over-year dynamics for the metro market. Twelve days vs 26 days to sell a home clearly is longer. Yet, pre-pandemic Sellers and Buyers experienced typically 30 to 60 days on the market. The supply remains tight – essentially half of what is needed for a truly balanced market in Denver.
Rising unemployment in Denver and statewide is not impacting the housing market at this time. State leadership has adjusted with the overall national economy to keep Denver and Colorado economically viable compared to Northeast, Southern, and specifically states like California. With many industries short on skilled labor, Colorado employers are likely to avoid retraining costs unless the national story becomes more severe. Denver and Colorado’s economic diversity aids in cushioning the residential housing market from a severe downturn.
As with last year, the supply shortage of housing materials has raised the cost of adding new homes to our market. Home quality and location will ultimately continue to sell a home in the new higher-rate environment. Buyers seeking “a deal” will still have to bear in mind that quality issues with their target property will be their leverage over a seller and the price ultimately paid. Sellers will continue to have to heed buyer interest and demand shaped by the role of the Federal Reserve.
Staying Current with Home Values:
For neighborhood sales facts, whether in Greenwood Village’s Cherry Hills Farm (80113), Cherry Creek North/City Park (80206), or Lodo/Central Business District ( 80202), reach a MASONmodern agent today. Mention the real estate section here at The Art Quarterly for a complimentary Comparative Market Analysis.