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Colorado Springs Real Estate Market Updates- January 2024
Denver Market Stats and Observations for January 2024
ACTIVE LISTINGS
- 4,870, up +18% from Jan ‘23
- This is a great sign for buyers – quite a bit more inventory to choose from
- Condos were up more (25%) than homes (15%) … great to see since condo inventory had been constricting more than homes.
- The long-term average (1985 -) for January is 12,200 active listings.
- As a reminder, the desperately low inventory record was 1,190 in January ’22.
- Thinking of this from a pre-COVID perspective, there were 4,940 listings in Jan’20. About the same.
NEW LISTINGS
- 3,280, +15% from Jan ’23. Homes were up more (18%) than condos (8%).
- Possible changes in consumer thinking driving this trend:
- The power of the low mortgage rate “golden handcuffs” might be starting to diminish as we predicted. Mortgage rates, while volatile as ever, are drifting down from highs in 4Q23 (7.8% in Oct’23 to 6.7% currently).
- Also, some owners that have moved on to their next home, while keeping the old home at a great rate, might be betting burnout from the experience of being a short- or long-term landlord, bringing a bit more inventory to market.
- There were eight new laws/regulations implemented in Colorado in 2023, all of which aided tenants and hurt landlords. We hear many stories of long-term rental investors that are selling their rentals – adding to inventory.
- Changes in family needs drive a lot buy/sell activity. You can put that off, but often it’s unpleasant to put it off for a long time.
- Headlines about inflation and the economy have improved a lot in the past few months. As a result, consumer confidence is +29% since November. Confident consumers are much more likely to buy/sell.
- Collectively, all these drivers could point to more listings in ’24 than ’23.
PENDING
- +6.5% from Jan ’23. Homes did better (12%) than condos (-7%)
- Lower interest rates (vs the peak in 4Q) and more inventories likely drove this.
- It’s a great sign that sales volume in ’24 could be higher than ’23.
- Still too soon to say we are past the bottom, but everything points in that direction at the moment.
CLOSED
- -6% from Jan ’23.
- I expect this could reverse in Feb, when ’24 will be a little higher than ’23.
- Many of the homes that closed in Jan ’23 were put under contract at/just after the high point for mortgage rates in ’23, so this decline is not a big surprise.
- Expect to see negative headlines that are out of context.
- A buyer with a $3000 / mo budget can afford $40,000 more home with the rate declines we’ve had since Oct’23.
- Total US sales in ’23 were 4.1 MM sales; the lowest level in several decades. Very high odds that we’ll see more sales in ’24.
PRICE
- +5% from ’23. Homes and condos were similar.
- I’d expect 4-5% appreciation this year if mortgage rates stay at about the same level.
- I do expect mortgage rates to decline, but its impossible to know WHEN that substantial decline will occur. When / if that happens, prices will go up at a faster pace for a few months, as there will be a lot of buyer demand and the seller supply wont’ grow as fast.
DOM days on market
- 49 days vs. 46 in ’23.
- We should be talking to prospective buyers about the increase in inventory, and the fact that the typical home is on the market for a month.
- There isn’t the big rush to see new listings minutes after they hit the market. When/if there is a serious decline in mortgage rates, we’ll have a return to the frenzied buyer activity. Buy NOW before that happens.
- Thinking of this from a pre-COVID perspective, the average was 45 DOM in Jan’20.
AVERAGE DISCOUNT
- 1.5% vs. 1.8% in ’23. Not much change.
- There are enough listings that buyers have some negotiation power for small discounts, concessions, and/or inspection items.
- Thinking of this from a pre-COVID perspective, the discount was 1.2% in Jan ’20.
Denver Housing Trends for January 2024
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