New home listings statewide increased nearly 24% in May compared to May 2023, creating a more balanced housing market, according to the latest market trends report from the Colorado Association of Realtors.
“Over the past decade, Denver has averaged around 1.5 to 2 months of inventory, a moderate seller’s market,” said Denver-area realtor Cooper Thayer.
In 2022, Denver experienced an extreme seller’s market with only two weeks of inventory.
“Last month, for the first time since November 2012, there was 3.3 months of inventory in Denver, as over 1,700 new listings hit the market and only 1,013 sales closed,” Thayer said.
“The current level of inventory is a strong indication that we are experiencing a balanced market for the first time in over a decade.”
Buyers and sellers are better matched in negotiating power, Thayer said.
“More than ever, sellers are providing concessions in transactions to assist with interest rate buydowns for buyers. Buyers, however, have generally compensated for this with higher offers.”
According to Aurora-area realtor Sunny Banka, having more options available is increasing the number of days homes are on the market.
“This gives buyers a chance to breathe before scrambling to make an offer on most homes,” Banka said.
The spring selling season has been slow in most markets statewide as buyers wait for interest rates to drop.
The lackluster spring market makes realtors wonder if the market will continue to struggle.
“With interest rates remaining high and the uncertainty of the upcoming election, many buyers seem to be waiting this one out,” said Boulder-area realtor Kelly Moye.
Despite the slower-than-expected sales, the median prices for single-family properties continue to increase. Statewide, the median home price increased 4% last month over May 2023.
Realtors anticipated that the market would improve when more homes became available.
“A year ago, agents would argue that we need more inventory and buyers would come back to the market. We are not seeing that play out and once again, the truth is the cost of housing is too high — at least in the median price points,” said Colorado Springs-area realtor Patrick Muldoon.
Rising home prices, high interest rates, and increasing property taxes and insurance premiums are pricing more potential buyers out of the market.
“Since 2018, Colorado homeowners have endured a more than 57% increase in insurance premiums, compounding affordability challenges in the entry-level segment,” Thayer said.
“If all goes well, inflation rates will continue to decelerate, and entry-level housing can become more attainable for new homebuyers.”
The news and editorial staffs of The Denver Post had no role in this post’s preparation.
