The 10-year Treasury yield, that market measure by which mortgage interest rates move daily, continues its decline amidst economic data of slowing consumer spending, lower household savings, rising household debt, and lower than expected employment in the private sector and non-farm payrolls driving national unemployment to 4.2%.?
- The Denver Metro Median single-family home price has remained strong and mostly stable, ending last week at $639,000.
- The Denver Metro Median home price for all property types has also remained strong and mostly stable, ending last week at $575,000.
- Increased buyer activity driven by declining interest rates has helped with price stability.
- An overall negative price curve is typical but likely not as significant as in previous years.
- Interesting to note that in each of the last three years, real estate values have largely not appreciated nor depreciated much. Instead, it has been timing the market where homeowners either made or lost money.
Buyer Activity & Showings
- Stellar seasonal buyer activity with 23,754 home showings last week across the 7-county Denver market, almost double the same time last year.??
- But … buyers are showing patience in their purchasing decisions, taking on average 32.27 showings per property to receive a contract.??
- While sellers can be hopeful by witnessing declining interest rates and the ongoing buyer enthusiasm driving showings, sellers must be incredibly aware of buyer power driving offer structure.??
- Last week, 10,134 homes were available for sale compared to 6,335 homes a year ago and just 3,434 homes in 2021.??
- Each week since mid-April, approximately 600 more new properties have come to market than have gone under contract.?
- Expired and withdrawn listings continue to outpace previous years averaging about 300 and 200 properties per week respectively, or a total of about 500 properties each week pulled off the market.
- Notable is the widening gap of new listings to under contract properties and how that continues to keep inventory elevated.??
Rising Seller Concessions
- The word appears to be out, buyers can dictate some pretty aggressive terms.?
- Last week saw the highest average seller concessions in the history of the Colorado real estate market with sellers agreeing to an average of $9,334 per contract.??
- April 25, 2024, hit the highest 12-month mark of the 10-year Treasury. Followed by the last 4 months' slide of almost 30%, driven by a host of economic indicators suggesting a recession is looming and the Federal Reserve is destined to cut interest rates to spur business activity.
- What has this meant for the real estate market??Mortgage rates are moving lower and lower.
- A 30-year fixed conventional loan is rapidly approaching 5.5% and FHA and VA loans are hovering just above 5%.?
- A sense of the greatest affordability for home buyers we’ve seen since spring of 2022.??
- The combination of the following factors gives buyers some incredible negotiating power and buying opportunity, the likes of which they have not seen since at least 2019.
- More available inventory … declining real estate prices moving into the slowest time of the year ?… driving more seller price reductions … offers below asking price … and elevated seller concessions.
- If interest rates continue to decline, the 2025 spring market will be very busy with rising home values and a boost to market volume.??
Buyers who buy now likely have the perfect storm of the lowest prices, great negotiation, strong appreciation potential, and the likely opportunity to refinance in 6 months as rates continue to decline.?
