As month-end active inventory skyrockets, the Denver Metro hit a new record for the average price of attached properties at $504,193. At the end of June 2021, Denver Metro ended with 3,122 properties on the market. It has now almost doubled that amount over the year, with a total of 6,057 properties currently sitting on the market.
Buyers are feeling the woes of the economy. Many first-time homebuyers who were initially pre-approved towards the beginning of the year with a specific interest rate decided to wait to buy until it wasn’t as competitive. But, when they restarted their search in May, they found that it was with an increased interest rate.
On the other hand, many sellers may have closed on a home earlier in the spring, meaning they went under contract with a certain interest rate, but decided to wait to sell their own home until they moved into their new one. And the consequence they saw is longer time on the market and potentially slight price reductions.
“The increase in supply will eventually impact pricing, days in the MLS and the relationship between buyers and sellers, which have negatively impacted buyers’ purchasing power,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “The stock market, inflation and cryptocurrency have all taken a hit in the last few months. Housing will eventually be a victim to the economy as a whole, but just how much is yet to be seen. It is realistic to see days in the MLS, currently sitting at a historic low of four, increase in the coming months.”
As we enter the second half of 2022, there is less competition for those getting into the market, but the cost of waiting has been significant for many first-time homebuyers. Interest rates are perceived to be high at the moment but may very easily continue to increase if inflation doesn’t decrease at a more rapid pace. With the 65.85 percent increase in inventory compared to the previous month, Denver Metro should expect more balance and multiple months with prices not going up. This is reflected in months-of-inventory, which is now at 1.19, the first time it has been above one in months since June of 2020.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999).
Akin to the overall market, the Luxury Market homes saw an adjustment as the Denver Metro hit the midway point of 2022. While all other pricing segments saw double-digit increases in new listings, there were more new listings in June for the Luxury Market but only a 6.82 percent increase.
The number of pending sales of detached homes dropped 21.87 percent month-over-month. Attached home pending sales were down 42.86 percent from May but closed sales increased 11.11 percent month over month. The amount buyers paid over the listing price also dropped from 106.85 percent in May to 103.71 percent in June. That means, on average, they still paid above the list price and more per square foot. That is the highest above asking price of all of the market segments.
“Luxury attached home sales were boosted by the completed sales of nine of 10 units at 1955 3rd Street in Boulder. Odonata is a boutique community with the nine units closing between, $2,980,390 and $3,542,863,” said Jill Schafer, DMAR Market Trends Committee member and Metro Denver Realtor®. “Overall, the sales volume of luxury homes increased significantly over $5 billion year-to-date for the first time at the midway point of the year. That’s a lot of luxury home sales, especially considering that two years ago at this time sales volume of luxury homes was only about $1.58 billion.”
Those who sold homes above $1 million didn’t have to wait long for an offer as the days in the MLS remained at an average of four for detached homes but inched up a day to five for attached homes. The average total price per square foot for detached luxury homes was up to $379 year-to-date, an 11.80 percent increase from 2021.