Buyers remain active but cautious, prices are showing signs of stability, but larger homes are selling, interest rates declined yet again and inventory jumped about 5%.
- The Denver Metro median single-family home price has remained strong and mostly stable since early May of this year, ending last week at $660,000.?
- Increased buyer activity driven by declining interest rates has helped with price stability.??
- If interest rates continue to decline, stronger than typical seasonal buyer demand may keep home prices elevated through year-end.?
- Still, expect an overall negative price curve but perhaps not as significant as in years past.??
- Interesting to note that each of the last 3 years has ended with a median home price for a single-family home within 1% of $600,000.?Meaning, real estate values have largely not appreciated nor depreciated over the last two years and instead it has been timing the market where homeowners either made or lost money.??
- Home showings remain extremely elevated for this time of year with exactly 25,000 showings last week, 10,000 more than one year ago.?
- But again, buyers remain cautious which makes the market feel excruciatingly slow for sellers.?
- If interest rates continue to slide, relative showing activity will remain elevated through year-end and be the catalyst for a very busy Spring 2025 selling season.??
- While total showings are seasonally very high, with the increase of inventory over the last couple of years, showings per listing each week remain extremely low, ending last week at 2.53 showings per property.
- To put it in perspective, however, the busiest years on record, 2020 and 2021, only had 4.63 and 6.16 showings per week respectively this time of year.??
- But what tells the tale of seller experience is the number of showings it takes on average to get a contract.?These are truly historic numbers at more than 50% higher than our market averages.??
- It typically takes 16 to 19 showings before a home goes under contract and as of last week and largely for the last 4 months it has taken closer to 30 home showings before a home goes under contract.?
- It cannot be overstated how strong buyer desire is right now.?But this data undeniably demonstrates buyer caution.?????
- Inventory jumped by about 500 homes last week, ending at 10,386 properties available for sale, compared to 6,595 one year ago.??
- Inventory may decline a bit between now and Labor Day, but expect inventory to rise as we reach early Fall and peak around the end of September.??
- All economic signs and trading principles of mortgage-backed securities point to a continued decline in interest rates.?
- As of Friday, August 23rd, a highly qualified buyer could get 5.875% on a 30-year fixed conventional loan and 5.25% on a 30-year FHA or VA loan.??
- If the economic signs and mortgage-backed securities trades play out as expected, we will soon see conventional 30-year loans in the low 5’s and government loans in the mid 4’s.
- This will spur not only a significant amount of buyer action but will inspire sellers who have wanted to move but have been too in love with their 3.5% rate on their mortgage to sell their home.??
- Expect a fairly significant increase in market volume over the next 12 months, as much as 20% higher than what we’ve seen over the last 2 years.??
