Homes on market at all-time low
The number of listings available for sale in metro Denver hit a record low of 1,184 homes and condos at the end of last month, as sellers put fewer properties than expected on the market, according to a monthly update from the Denver Metro Association of Realtors.
Metro Denver has averaged 12,732 active listings in January, according to counts going back to 1985. At the end of January, there were only 788 single-family homes available and 396 condos and townhomes, leaving buyers with very limited options, said Andrew Abrams, chairman of the DMAR Market Trends Committee, who used a retail store analogy to explain how tight supply is.
“Just imagine how many brickand-mortar clothing stores there are. Once you get to 10, remove nine of them and shop there exclusively. Welcome to a buyer’s life in this market,” Abrams said in the comments accompanying the report.
There were nearly half as many listings available at the end of January as there were at the end of January 2021, which was considered a very tight market. And it is only 100 more than the 1,084 homes destroyed in late December in Boulder County because of the Marshall fire.
Fewer new listings than normally seen in January contributed to the problem. Typically, the jump in new listings between January and December averages 70% as the holidays wrap up and owners focus again on selling, Abrams said. This year the increase was only 31% or 3,479 new homes, compared with 4,231 listings put on the market in January 2021.
The lack of properties to buy is crimping sales in a big way. Closings last month fell 40% from December to 2,847 and are down 11.8% from a year earlier. When buyers do make a purchase, they are paying 102% on average of the listed price to beat out competitors.
The median price of a singlefamily home sold last month in metro Denver fell from $599,990 in December to $595,000, a monthly decline of 0.83%. The median sales price for condos and townhomes went in the other direction, increasing from $382,500 in December to $400,000, a monthly gain of 4.6%.
Over the past year, median sales prices are up 16.8% for homes and 19.2% for condos.
The lack of supply could be self-reinforcing. Sellers in most cases quickly can find a buyer — half of the properties available last month went under contract in five or fewer days. The problem is what comes next — trying to find another place to live.
Demand largely has held up, despite higher mortgage rates, higher prices and limited supply. One motivator for buyers could be fears of worsening affordability in the months ahead.
After marching higher, mort
gage rates stabilized this week at 3.55% on a 30-year loan, according to Freddie Mac, which guarantees mortgages. A year ago, those rates averaged closer to 2.7%. Some forecasts are calling for rates to reach 4% this year.
“As the economic recovery continues going into the spring and summer, mortgage rates are expected to resume their upward trajectory. In the meantime, recent data suggests that homebuyer demand continues to be elevated as supply remains low, driving higher home prices,” said Sam Khater, Freddie Mac’s chief economist, in a weekly mortgage market survey.