We're seeing the Denver Metro area market begin to gain momentum as we head into 2023. As rates dropped from an average of 7.25% to 6.125% nationwide, we saw mortgage purchase loan applications increase by 29% in just two weeks (The Rueth Team). Buyers are entering 2023 bullish and adamant about locking in a home before the spring rush. Stale listings from 2022 have resurfaced on the market and are selling within the first week with multiple showings and offers. With limited homes added to the market within the first few weeks of the year, we need more inventory. This will be a recurring theme throughout the year for the Denver Market. But do not fret. This market dynamic still presents both buyers and sellers with tons of opportunities.
What beginning of 2023 has looked like
The narrative has definitely changed. Sellers no longer need to offer point-buy-downs, inspection concessions, and price adjustments. Buyers are making the most of the start to the new year, pushing out the competition before the inevitable spring rush. Pending home sales jumped up 51% from last month, while the market is still down 8.5% year over year, due primarily to available inventory, not demand. As new listings arrive, they immediately fly off the shelves due to savvy marketing and active buyers.
Just last year, the Denver Metro area market experienced a 12% median price growth. This marks our transition into officially entering a compression cycle. Meaning, more homes are going under contract than available on the market. This creates a dynamic shift in the relationship between supply and demand, resulting in multiple offers becoming more and more popular. It's safe to say that if inventory is not consistently added to keep up with market demand, we can anticipate home prices to stabilize and remain positive.
Sellers: Don't be discouraged by days on market
At the end of 2022, we saw days on the market begin to creep up, which is understandable given the holiday season at the end of the year. In the first week in February however, we saw median days on the market plummet down to 16 days. Homes priced right and showing well are flying off the shelves. Sellers resistant to changing their marketing and pricing strategy will be quickly left behind and may miss out on some of the best market conditions ever experienced in Metro Denver.
On average, over the last 15 years, we've experienced an average of 75 days on the market. It's important to note that this number fluctuated during 2008 - 2010 due to our nation's housing crisis, in which the average days on the market were 126 days. If you were to remove those two years in conjunction with 2020-2022, the average days on market in January is expected to be around 34 days, so we are off to a strong start for 2023. So much so that we've seen a clear increased interest in coming soon properties, with the odds of selling to increase, close to 60%.
Buyers: Get ahead of the spring rush
The market is your oysterat least right now. The Denver Metro market has always had a 'spring rush.' Super Bowl weekend generally kicks off the start of our busy market, with Presidents Day weekend marking the proper start to the busy season. Super Bowl weekend is the kick off to our market as we see showing activity increase by 30 - 40% from the previous week for those looking for homes under $1 mil. For those looking in the $2 mil + price range, they are still spending time at their second homes and typically re-enter the market around Presidents Day. Right now, buyers should take advantage of the current market before it becomes more and more competitive.
Denver is a stable and popular market, but the topic of conversation for this year will be inventory. Theoretically, our inventory is similar to what we experienced in 2019, pre-pandemic. For eager and proactive buyers establishing a strategy sooner rather than later will result in success. It's worth reaching out to your agent, even if you're just entertaining the idea, so you don't miss out on some of the best market conditions we've experienced in a while.
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