As we look back at the statistics for February, inventory and demand continue to plague buyers in the Denver market. To give a better picture of the inventory situation, consider that the record-high for February was in 2006 with 25,484, February 2022 set a new record low at only 1,226 listings. Compared to 2021, active listings in February were down 39.43%. As far as inventory that came and went in February, there were 4,193 new listings, up 20.56% over last month, but down 7.44% from last February. Long story short, it is a great time to sell a property.
Close to List Price
Another metric we are keeping an eye on is close to list price. February homes sold at an average of 104.75% of their listed price, 105.2% for detached homes, and 103.85% for attached properties. For a $500,000 home that is a difference of $23,500. In February, 68.71% of homes in the Denver Metro area sold for above the listed price. This is also challenging for buyers as appraisal gaps are all but required for winning offers.
Appreciation and Interest Rate Increases
In a recent report from Corelogic, they stated that Denver saw 19.1% appreciation in the last year. One thing that could slow appreciation would be interest rate hikes. Many suggested that strong economic and job growth as well as uncertainty in Ukraine would delay the Fed’s interest rate increase, but early reports are predicting a 0.25% increase will be announced at its meeting next week. It would be the first-rate hike in three years.
While any inventory is appreciated, we are seeing move-in-ready homes receiving the most attention and offers. The volatility of the cost of construction and scarcity of quality contractors have many buyers wary of taking on a fixer-upper. We have heard of contractors that are scheduling work for summer 2023. This does create an opportunity for buyers willing to invest in a home, but make sure you understand the costs associated. If you decide you’re interested in a home that needs major work, it is valuable to talk to a contractor prior to getting under contract to understand their timeline and price.
Denver’s market is intimidating for buyers, whether it is your first property or your tenth. Make sure you have an experienced agent that will advocate for you every step of the way. Have any questions about buying and selling? Give us a call or shoot us an email!