This month the Denver real estate market experienced several factors that took precedence over buying and selling homes. We had Memorial Day BBQs and pool parties, graduation celebrations, polarizing debt ceiling debates, and we can't forget to mention the unpredictable weather we've been experiencing. While the unseasonable rain has discouraged some from venturing out to open houses, it has yielded us with incredible lush and vibrant landscapes making homes look better than ever.

Denver's seasonality typically allows for a predictable annual real estate cycle, but 2023 has been anything but certain. After a few years of abundance for everyone - today's market's uncertainty requires folks to break through their fears and strategize for success. There are many reasons to remain optimistic and several strong indicators that show our market is thriving.

Guide To The New Normal

Historically, in May we see a slight decrease in activity due to the various holidays, graduations, and school concluding. It is clear however, that this year we are experiencing a market that is slightly veering off course of historical trends. Data shows that 17,164 homes have closed thus far this year. Despite the Denver area closing far fewer homes this year than we did over the past four years, closed sales increased by 6.7 % in May. As we enter this unusual season in the market, we've seen a 13% pop in active listings this month, a 53.3% increase from where we were back in 2019. Some sellers are crushing it right now with 40 showings, over ten offers, and selling their homes well over the asking price. On the other end of the pendulum, some buyers are finding the deal of the year in a slower neighborhood or in an 'unperfect' home.

The Denver Metro area is home to 3.3 million people, with roughly 1.6 million households. We ended May with 5,228 homes for sale, meaning there is only one home for every 313 households. As we continue to see inventory struggle, we're seeing multiple offers becoming more popular since there are more buyers in the market than homes to sell, resulting in homes continuing to have a close-price-to-list price ratio for all homes types remaining above 100%.

 

The Politics Of It All

As discussions on the debt ceiling continued this month, a lack of economic certainty plagued many buyers and sellers and deterred them from entering the market. While the debt ceiling does not directly influence mortgage rates, defaulting on our national debts would be catastrophic to our reputation on the world stage. Not only would it reinforce nationwide economic instability it would drastically affect our economic standing and strength on a global scale.

With a deal signed, we are seeing key market factors return to "normal." While it's safe to say we can anticipate a recession, there is data to support that inflation will continue to decrease, allowing affordability to improve. Thus, rebalancing our interest rates, which took a stressful and unexpected turn last month with a surprise hike to 7.14%.

The word "recession" immediately comes with negative connotations, but it's important to remember there are some benefits, especially regarding the housing market. We want to SLOW down our economy - just enough for supply to balance and prices to soften so pent-up buyer demand can eat up stale inventory.

In times of uncertainty, the ones who are successful emerge as thought and market leaders. Ignore the negative noise and get ahead of the curve. Empower yourself through the latest real estate data trends and our neighborhood experts will help you effectively move and operate towards real estate success.