Market Update January 2024

HAPPY NEW YEAR!

Interest Rates Are Coming Down!

I hope you had a wonderful holiday! We had a great time hosting this year but my husband says next year we are going to go lay on a beach for Christmas.

As the new year brings lower interest rates, pent up buyers and sellers are hoping to finally make a move this year. Lower interest rates will allow buyers to get a bit more for their money and hopefully, give them more options.

The number of listings began dropping mid 2023 as interest rates climbed and continued to decline as the year progressed leaving many buyers out in the cold. We are anticipating rates dropping multiple times this year which should make it more palatable for homeowners that want to move since many will also need to turn around and buy in this market. Hopefully, buyers will have much more inventory to chose from this Spring although it will take awhile to get real relief.

With our inventory still very low, supply and demand is keeping home values from declining. In the end, home values in 2023 increased ever so slightly from 2022. As homeownership becomes more and more expensive in the Denver Metro area, I don’t think we will see the huge increases that we’ve seen in the past. Here is how our market has performed over the last 10 years (note: I’m using data from Denver, Douglas, Arapahoe and Jefferson counties).

We will have to wait and see what 2024 brings us but most analysts are hopeful. If you are interested in seeing where our local economy is heading, make sure to register for the 2024 Economic Summit (see below). It is a virtual event and Elliot Eisenberg is not only entertaining but he brings a wealth of knowledge so check it out.

I HOPE 2024 BRINGS YOU MUCH HAPPINESS AND SUCCESS!

Let me know how I can help you this year. I’m always here to take your call.

MARKET STATS

	Dec, 2023	Nov, 2023	Dec, 2022	Nov, 2022
New Listings	1,213	2,013	1,282	2,009
Active Listings	3,676	5,149	4,039	5,132
Number of Sales	2,044	2,079	2,149	2,318
Avg. Sales Price	$684,483	$681,774	$659,213	$682,494
Avg. Days on Market	44	36	42	33
Pending Listings	1,800	1,901	1,673	1,940

	Dec, 2018	Dec, 2019	Dec, 2020	Dec, 2021
New Listings	1,679	1,907	2,271	2,012
Active Listings	4,745	4,373	2,444	1,442
Number of Sales	2,760	3,368	3,936	3,589
Avg. Sales Price	$467,255	$491,809	$555,018	$650,615
Avg. Days on Market	40	40	24	17
Pending Listings	2,248	2,505	2,574	2,386

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

OTHER STATS

Nationwide, existing home sales rose by 0.8% in November, marking the first increase in 5 months.
Conditions for housing are expected to improve as interest rates decline, unlocking inventory, fostering moderate home price appreciation and facilitating smoother transactions.
A recent survey revealed that one in 5 homeowners with plans to move had considered renting their homes in 2023; however, financial constraints and manageability realities led 64% of them to ultimately decide against becoming landlords.
More than 1/3 of non-agent sellers (for sale by owners or owners who sold to an iBuyer) said the selling process was more difficult than they expected, admitting that they struggled to understand their purchase contract, made legal mistakes and were distrusted by buyers in the marketplace.
A majority of Colorado voters say homeownership is only going to become less attainable, voicing concerns about the cost of living and the state’s broader affordability.
To address the housing affordability challenge for educators, some school districts are exploring building tiny homes on their land.
The Denver Housing Authority completed renovation of a former medical office building at 655 Broadway into an affordable apartment complex. The nine-story building houses 96 affordable units for seniors and disabled individuals.
2023 witnessed mortgage rates volatility, introducing uncertainty among buyers. While the 30 year mortgage rate began and ended the year at 6.6%, rates got as low as 5.99% and as high as 8%.
Federal Reserve Chair Powell announced 3 rate cuts in 2024.
The market believes the Fed will start cutting rates as soon as March, since inflation is expected to drop for both January and February based on 2023’s 0.5% and 0.4% month-over-month numbers getting replaced by 0.1% to 0.2%. However, geopolitical events creating additional supply chain restrictions could alter this trajectory.
For housing to become attainable, Americans either need more rates to fall below 5.5%, wages to increase or a combination of these factors.
While an assumption purchase can assist a buyer in securing a low-interest mortgage, servicers such as PennyMac are severely backlogged, causing transactions to extend 90 days or more.
Interior design trends for 2024 highlight a shift from black houses, brass fixtures, sharp angles and white oak floors and finishes to more earth-toned homes, silver fixtures, curved architecture and rich, darker wood tones.

Source: Denver Metro Association of Realtors