Market Update December 2023

HAPPY HOLIDAYS TO YOU & YOUR FAMILY!

Homeownership Is Still Appealing To Buyers.

I hope you are enjoying the holiday season so far. I will have a full house this year with my extended family joining us for the holidays so I’m a little stressed but very excited and grateful that we will all be together this year.

As for our real estate market, our recent trends continue. Our usual 4th quarter slow down is a little bit slower this year but not my much. Look at the stats below and you can see the number of new listings, active listings, and pending listings are very similar to November of last year. We are seeing some homes sit a bit longer so number of sales is a little lower than last year but not by much.

Most buyers are still wanting a home they can own rather than rent as we are seeing when interest rates drop even a little. More buyers are jumping in with the slightest movement. When renters complain to me about their rent continuing to go up and having to continually move because they can’t afford or don’t want to pay their high rent but not sure having a mortgage at a higher interest rate is a good idea, I tell them you’re paying a mortgage whether you like it or not. If you are renting, it’s just someone else’s mortgage. It’s also important to remember that mortgages can always be refinanced down the road.

Financial institutions are predicting that the Feds will lower interest rates in 2024 which should help borrowers get into the market at a lower interest rate.

Once again, it will be interesting to see what January brings. If you are looking to buy or sell, just get all your ducks in a row with financing, getting your home ready, starting to talk to a great real estate agent and then follow the market.

CHEERS TO A WONDERFUL HOLIDAY! I HOPE 2024 BRINGS YOU GREAT SUCCESS AND HAPPINESS!

MARKET STATS

	Nov, 2023	Oct, 2023	Nov, 2022	Oct, 2022
New Listings	2,008	2,887	2,009	2,953
Active Listings	5,038	5,847	5,131	5,891
Number of Sales	2,071	2,387	2,318	2,648
Avg. Sales Price	$682,607	$708,490	$682,494	$686,129
Avg. Days on Market	36	29	33	27
Pending Listings	1,965	2,190	1,940	2,379

	Nov, 2018	Nov, 2019	Nov 2020	Nov, 2021
New Listings	2,908	2,713	2,817	2,861
Active Listings	6,114	5,686	3,203	2,053
Number of Sales	3,108	3,153	3,999	4,079
Avg. Sales Price	$470,074	$493,644	$557,138	$644,883
Avg. Days on Market	31	34	22	15
Pending Listings	2,747	3,046	3,442	3,334

(Source: MLS: Arapahoe, Denver, Douglas & Jefferson counties)

OTHER STATS

- With homeowners sitting on record low interest rates, we may see a rise in loan assumption transactions.
- Homes in great condition and priced well continue to attract offers within a week or two of listing. Conversely, homes in need of “work” linger on the market, awaiting buyers who often hold out for 2 to 3 price reductions before making an offer. [I wanted to include this since this is what I’ve been saying for awhile and DMAR concurs]
- Denver ranked as the 5th most popular city for Millennials relocating in 2022, constituting 40.78% of the city’s total population.
- First time homebuyers, despite facing high prices and interest rates, remain a dominant force in the market, with the percentage of homebuyers aged 25 to 34 with a co-borrower aged 55+ increasing from 0.6% in 2000 to 2.5% Q1 2023.
- The wealth gap between homeowners and renters is widening, with the median net worth growth from 2019 to 2022 being the largest 3 year increase over the history of modern Survey of Consumer Finance. Homeowner households now have a net worth 40 times higher than that of renter households.
- New loan limits for 2024 were released, with National Conforming at $766,550 and Denver Metro at $816,500.
- Mortgage purchase applications demonstrated that even small rate movements can significantly impact buyer activity. In November, mortgage purchase applications increased by 16% as rates dropped 0.56% to 7.13%.
- Wall Street investors increasingly believe that there is a higher likelihood of the central bank cutting interest rates by May 2024.
- The current Fed Rate stands at 5.25% to 5.5%. Predictions from financial institutions vary, with UBS forecasting a Fed Rate of 1.75% in 2024, Morgan Stanley at 2.38% and Goldman Sachs at 4%. All forecasts anticipate a recession, higher unemployment and a weakening consumer.
- While the potential for rental income has increased across generations, a recent Zillow survey showed that 55% of Millennials homebuyers and 51% of Gen Z buyers prioritize rentability in a new home purchase, compared to 39% of all homebuyers. Latinx individuals are particularly inclined to rent out a portion of their homes.
- In 2022, 21.2% of Colorado’s workforce worked remotely, 6 percentage points higher than the national average. The figure declined by 2.5 percentage points as some returned to in-person work.
- On November 18th, Fannie Mae released their 5% down owner-occupied multi-unit purchase loan program, complemented by 2024 loan limits of $1,045,250 for 2 units, $1,263,500 for 3 units and $1,570,200 for 4 units.
- Denver County has seen a record number of eviction filings, prompting a $30 million assistance package in November to mitigate evictions statewide.
- 17 states, including Colorado, have chosen black as the top front door color making it the top-trending front door color in the U.S.

Source: Denver Metro Association of Realtors