What do these numbers mean? To help understand what these numbers mean to our local markets we are now including the number of sold comps during the past 30 days or 1 month.  Looking at our sold numbers over the past month allows us to calculate a monthly absorption rate.  An absorption rate tells us how many months it would take to sell off our entire inventory should we have no new listings.  A balanced market is considered 6 months.

2024 Year End Narrative

As we closed out 2024, the final week of the year brought the usual mix of seasonal quiet and significant market milestones. The trifecta of holidays—Christmas, Hanukkah, and Kwanzaa—followed by New Year celebrations, historically represents the least active period in the market. Sellers, after seeing limited showing activity and preparing for the festivities, often pulled listings from the market or held off listing altogether in hopes of better conditions in the New Year.

Residential resale inventory in the 7 metro Denver counties has dropped from its peak of 10,617 homes for sale on October 16, 2024 to 6,723 as of December 31, 2024 marking a decline of 37%.

What makes December 31st at midnight remarkable is not just that we get to put 2024 behind us and we all start back at zero, but also this day historically represents the single highest day of the year for listings to expire. This year was no exception and on the final day of 2024, 829 units expired.

2024 Saw a notably higher level of expired listings on the last day of the year, nearly double the amount recorded in 2022 and in 2023. The rise in expired listings this year likely due to the elevated amount of inventory we have reported since April of 2024, with more inventory and the buyer pool continuing to be lower for the third year in a row it’s not shocking that we had more listings expire.

Diving deeper into expired listings, looking back at the number of expired listings in Q4 of 2023 in the 7 metro counties there were 2,874 units that were pulled off the market. Out of curiosity, I wanted to see how many of those expired listings were relisted in hopes better market conditions to sell in Q1 of 2024 and surprisingly only 274, or slightly less than 10%, of the previous quarter’s expired listings were relisted. I’ll be digging deeper into expired data over the next few weeks.

Key Highlights of the Week

Inventory Levels
Inventory continued its seasonal decline, with fewer active listings week over week. However, year-over-year inventory remains significantly higher compared to the same week in 2023. While fewer homes were added to the market, the elevated overall supply combined with slower buyer activity underscores a challenging environment for sellers.

Market Dynamics
New listings and “coming soon” properties declined sharply, both week over week and year over year. Pending transactions also saw a notable drop, contributing to an increase in the predictive month’s supply of inventory. This growth highlights the ongoing imbalance between supply and demand, a trend that has persisted throughout 2024.

Odds of Selling in the Next 30 Days
The Odds of Selling dipped to one of their lowest levels of the year, reflecting the seasonal slowdown. Historically, December’s Odds of Selling have hovered around 49.2% in previous market cycles, but current levels remain well below those benchmarks.

Showing Activity
Showings also declined, both on a weekly and yearly basis, with an average of just under one showing per property. For homes that went under contract, it took a median of 19 showings over 60 days, a timeline significantly longer than in previous years.

Price Reductions
The rate of price reductions continued to rise slightly, with more than half of the homes going under contract having undergone at least one price adjustment. The average size of these reductions grew, signaling that sellers are increasingly willing to negotiate to meet buyer expectations.

Looking Ahead to 2025

As we reflect on the final week of 2024, we are reminded of the opportunities that come with a new year. Thank you for making 2024 a year of growth and learning in the metro Denver real estate market. We remain committed to providing the data and insights you need to keep your clients informed and successful in their transactions.

Special thanks to Megan Aller with First American Title for the market stats/narrative.

The post Denver Metro 6 County Inventory Count appeared first on NeXstep Real Estate Group.

Our annual shoe drive was a huge success in 2023.  With your help we are proud to have collected 698 pairs of shoes.  Thanks to all our great clients and wonderful neighbors who helped us collect shoes for Soles4Souls! Thank you so much for your support.  We will be back in 2024 and will once again look for your help to support this great cause!  Contact your favorite NeXstep Realtor if you have any questions.  Thanks again!!

HERE’S HOW YOU CAN HELP:
Collect your used shoes for our 2024 shoe drive and help support people in need,  both locally and internationally. All sizes, styles & types of shoes are needed for men, women & children.  For more information on Soles4Souls and to learn more about this great organization CLICK HERE…

CONTACT US FOR SHOE PICKUP
Simply contact us and schedule a pick up during the month of April 2024.  Leave your donated shoes on your front porch and we will come pick them up!  It’s that easy…

The post Thank You 2023 Soles4Souls Shoe Drive! appeared first on NeXstep Real Estate Group.

Our annual shoe drive is back and we are looking for your help to support this great cause!  Contact your favorite NeXstep Realtor before April 28th and give your old “Soles” a new life.

HERE’S HOW YOU CAN HELP:
Donate Your used shoes to people in need,  both locally and internationally. All sizes, styles & types of shoes are needed for men, women & children.

CONTACT US FOR SHOE PICKUP
Simply contact us and schedule a pick up.  Leave your donated shoes on your front porch and we will come pick them up!  It’s that easy…

About Soles4Souls
Donating your used shoes can make a world of difference.  Whether they’re new or gently-loved, donate your shoes to protect the planet and help lift people out of poverty.  To learn more CLICK HERE…

DEADLINE: WED, APRIL 28TH

The post Give Your Old “Soles” A New Life! appeared first on NeXstep Real Estate Group.

Special Thanks to Nicole Rueth with her recent article posted by the Denver Metro Association of Realtors

Did you see the smirk on the face of 2022 as she gave us one last gift on her way out the door? During the last 15 days of the year, rates jumped from 6.125 percent to 6.54 percent. An opening China, a hawkish Japan, confident Americans, a strong workforce, and light holiday trading were all to blame. But I saw the smirk as the door clipped her heels. It is a year that will go down in history as the worst year for mortgage rates in terms of the pace of the rate spike, but maybe it was just the bill coming due, the housing and mortgage market party coming to an end. If you add it to the previous two years and divide it by three, some might argue it was a fair price to pay.

The average Denver home appreciated 44.6 percent, reaching its peak in May 2022. Since then, it has given back 4.95 percent of the gains. Home sales exploded to levels well above anything we’ve seen in the past decade, with 64,000 homes sold in 2020 and 2021 dropping to an average of 60,000 homes sold in the last three years, still well above a Denver 2012-2019 average of 55,194. Rates plummeted well into new all-time lows and stayed there for much longer than any previous period in history. Even if we look outside housing to the stock market, there were gains of almost 50 percent. Add in 2022, and we are still up 20 percent from pre-covid levels.

So, where do we go from here? Well, it’s not going to get worse.

Rates hit their high and came down, inventory locked up, sales dropped, and demand is still pent up. There is a path from here. News cycles in quarter one will pick up year-over-year comparisons, which will look worse, but watch the trends, feel the boots on the ground, and pay attention to inflation, job loss, and rates. The Fed is moving towards raising the fed rate two more times by 0.25 percent each. This is already baked into the market. So it’s on inflation and jobs. When inflation drops further (which it will as supply has loosened up) and when wage inflation is curtailed by job loss, rates will drop below 6 percent, and the mood will change. 2023 will be a renormalizing year. Let’s break down what to expect for home prices, inventory, rates, and demand.

Home Prices

Those markets which appreciated the most, along with an abundance of new construction, will see the biggest corrections. As you know, Denver saw incredible appreciation adding us to the list of least affordable metros to buy. New construction in Denver has also not been scarce, yet as of November, Denver single-family home permits dropped 64 percent from their cycle peak in March 2022. The last time we saw these low permit numbers was in 2014.

This drop-off in new construction, in addition to low existing home inventory, mortgage rate stabilization, and demand recovery, will all support home prices. If you believe that inflation will go back up, the Fed will have to get more aggressive in raising the fed rate, and mortgage rates will increase, slowing demand again, thereby dropping home prices. I don’t believe that. I believe inflation has seen its peak, both locally and globally. Rates will stabilize, and demand will pick back up. But not quite yet. Through the first quarter of 2023, we will see some buyers come out and take advantage of seller credits and discounts, further lowering respective home prices. Quarter two will see prices flatten out from their descent, then turn slightly upwards in the second half. All that assumes inflation will be curtailed, and rates will start their move into the 5’s. 2023 overall appreciation will be in the low single digits by year-end. Remember appreciation was only 2.5 percent in 2019, and it was a good year.

Inventory

While mortgage rates were the conversation for 2022, I believe inventory will take a front seat in 2023. This is the topic that gives me pause. Inventory ended the year with 4,757 homes for sale. While still lower than in 2019, this number is more in line with 2014-2019. The difference from then to now is that the average mortgage rate from 2014 to 2019 was 4 percent, not the 2.75 percent lows we saw in 2020-2021. 24 percent of all mortgages are now locked in below 3 percent. Another 41 percent are between 3 and 4 percent. Keep in mind that 38 percent of homes don’t even have a mortgage. That means 65 percent of all homes have a rate below the ones we see this year. This “rate lock” in addition to the rapidly declining permits and starts; will further support stable home prices.

As rates drop, sellers, i.e., “would-be buyers,” will put their houses on the market. If they choose to test the market by overpricing, Days on Market will continue to increase from December’s 30 median days in the MLS. However, if they come out aggressive, understanding the market shift, they will see multiple bids and quick sales. On average, homes that had to drop their price stayed on the market twice as long as homes priced right.

Also, do not expect any pop in inventory from distressed sales. Short sales and foreclosures will remain limited. Suppose we see a massive 15 percent decline in home prices nationwide. In that case, we will still only see 3.7 percent of our mortgaged properties dip into negative equity territory, with the majority purchased just last year. Low locked-in mortgage rates and monthly payments will support even those who lose their job from losing their home.

Rates

Lower rates might not be everyone’s cure-all, but it sure is ours. Seeing rates rise above 7.25 percent sank the hearts of would-be buyers putting both buyers and sellers at a standstill in 2022. Rates have since dropped back to the low to mid 6’s. Lower inflation and a slower economy will continue to give bonds the relief they need, dropping yields and lowering our rates. We have now had two lower inflationary reports, with the next Consumer Price Index report due on January 12th. In addition, December’s unemployment report will also be released on Friday, January 6th. If we see the core CPI drop from 6 percent and unemployment increase from 3.7 percent, we will see mortgage rates drop again. While I would love to see them drop straight to 5 percent, realistically, it will not be a straight line, nor will it be fast. Rates will continue to react to global economies, GDP, employment, and inflation. Nevertheless, I am hopeful that we will see rates drop into the mid 5’s consistently by late Spring or early Summer.

Demand

Having seen the calendar turn over, the largest borrower age group is now 32 years old. We have years of pent-up demand, with first-time home buyers still at an average age of 34. They were priced out for years, then feared out. Many want to own, creating long-term wealth only real estate provides most Americans. But affordability will continue to be the limiting factor, especially in the Denver market. As rates fluctuate, we will continue to see buyers react. As rates dipped in November/early December, we saw seven weeks of slowly returning buyers through increasing mortgage purchase applications. Then, during the last two weeks of December, rates moved back up above 6.5 percent, and so went the buyers, with applications dropping 12.2 percent from just two weeks earlier.

Buyers today have the advantage of less competition and more negotiating power. That opportunity will evaporate as rates drop below 6 percent and more buyers come back into the market. While I would advise all buyers to jump in now, I also want to express caution. A buyer today is looking at the long-term benefits of owning a home: the lifestyle, stability, and protection a home provides. Yes, real estate will always go up in value, but short term, we could be in for a little more price instability.

So my advice? Buy when it’s the right time in your life. Make sure you have job stability and a little money in the bank. Then, go in with confidence knowing the Denver Metro continues to provide long-term appreciation and a beautiful place to live.

Well, that’s a wrap. Until next time, this is Nicole Rueth with the Rueth Team, powered by OneTrust Home Loans. It’s my pleasure to keep you updated…and say farewell to 2022!

The views, opinions and positions expressed within this guest post are those of the author alone and do not necessarily represent those of the Denver Metro Association of Realtors®. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

The post It’s Not Going to Get Worse appeared first on NeXstep Real Estate Group.

How did they do it?  Per the article 5280 magazine looked at a variety of data points including: crime, school rankings, and home prices.  They looked at all 73 neighborhoods and weighted is category to come up with their top 25.   To see a map of the Denver Neighborhoods: CLICK HERE…

“Our ranking is based on four variables: home prices, crime data, school rankings, and an X factor score that accounts for things that can’t be easily quantified, such as access to open space, public transportation, and restaurants and shops. Each category is weighted: 30 percent for year-over-year percentage change in home values; 25 percent for safety; 15 percent for neighborhood school ratings; and 30 percent for the X factor. Our initial list of 78 neighborhoods (which was whittled down to 73, as you’ll read below) is based on the city of Denver’s official map. That explains why you won’t see areas like LoHi or RiNo mentioned; officially, they’re not considered their own neighborhoods—even though locals would probably disagree.

Here is a summary of 5280 Magazines top 25 Neighborhoods

1-5                                     6-10                      11-15                                    16-20                         21-25

1. Wellshire                   6.  Speer                  11. Country Club                   16. Central Park       21. Whittier

2. Belcaro                      7.  S. Park Hill        12.  University Park             17. N Park Hill          22. Berkeley

3. Washington Park    8.  Sloan Lake        13. Hale                                  18. Skyland               23. Mar Lee

4. Platt Park                 9.  Hill Top              14. Congress Park                19. Cherry Creek      24. W. Highland

5. City Park                  10.  Union Station  15. Gateway/Green Valley  20. Hampden S.      25. Highland

The post 25 Best Neighborhoods In Denver appeared first on NeXstep Real Estate Group.

“Compared to other past winter seasons, this winter season’s sales activity will be stronger,” says Lawrence Yun, chief economist of the National Association of REALTORS®. “This winter, there will be more sales compared to pre-pandemic winters going back all the way to 2006.”

The momentum from the last few months is expected to continue. From March through October, homes have been selling faster than they traditionally do.

“Although there are fewer buyers in the winter months than in the competitive spring and summer period, all signs suggest that housing demand remains high,” says Danielle Hale, realtor.com®’s chief economist.

Housing inventories remain tight. The inventory of unsold homes fell by 12% in October compared to last year, according to NAR data. A limited supply of homes for sale is an ongoing issue for the housing market against continued strong demand among potential home buyers.

Homes are selling fast. Eighty-two percent of homes sold in October were on the market for less than a month, according to NAR data.

“Many sellers should not feel the need to wait until spring, especially in high-demand areas,” Kelly Mangold, principal at RCLCO Real Estate Consulting, told realtor.com®.

Buyers may feel more rushed and may try to qualify for historically low mortgage rates ahead of any more rises. The 30-year fixed-rate mortgage averaged 3.10% last week, according to Freddie Mac. NAR is forecasting that rates will increase to 3.50% by the middle of 2022.

Home price increases may be leveling off somewhat, too. “The days of fast price gains are over,” Yun says. “There will be few pockets of the market where bidding wars do occur, but sellers should expect much less than what was occurring the past 12 months. Home prices generally will be higher price compared to one year ago, but maybe a bit lower compared to what occurred in the summer.”

The post Yun: Expect an Unseasonably Hot Winter for Home Sales appeared first on NeXstep Real Estate Group.

Happy New Year! It’s time to look back and ponder what happened over the past year and look ahead to set goals and make predictions for the new year. Let’s start by looking at the top three things we know about the Denver metro real estate market in 2019:

1. Inventory continued to be scarce. The Denver metro area saw a significant increase in homes for sale in 2018, up 44.71 percent from 2017. That prompted talk of recession and fears of another housing crash. But at the end of 2019, that pile of inventory shrunk. We ended the year with 9.68 percent fewer homes to choose from year over year. The main reason we saw fewer choices was not because more were going under contract or selling, but because 29.94 percent fewer new listings came on the market in December compared to the month prior.
2. Considering the average rate of sales, it would take only 1.13 months to sell all detached homes and 1.37 months to sell all attached homes in the Denver area. For perspective, in January 2010 we had 9.8 months of attached home inventory and 9.8 months of detached home inventory. Anything under four months means sellers have the power in negotiations, while more than five months means buyers have control. We have started 2020 with sellers firmly in control.
3. There was an increase in the average number of days it took to sell a home in 2019. For three years it took an average of 26 days to sell. This past year it jumped up 19.23 percent to 31 days. That spooked a lot of sellers who had been hearing about their neighbors’ homes getting multiple offers in the first few days on the market. When that didn’t hap­pen, sellers started dropping their prices.
4. Despite more price reductions, home values continued to go up. Not at eight to nine percent like we saw earlier in the 2010s, but up nonetheless. The average close price in 2019 was $486,695 – that’s 2.85 percent higher than in 2018. If you take a longer look back to get more perspective, you’ll see what a fabulous investment real estate is in the Denver metro area. The average residential close price increased 87.82 percent from 2010 when it was only $259,084.

2020 Predictions…

The great thing about sales data is that it looks at what we know happened and then we can compare it to years past to get perspective. We hope by doing that we can come up with a prediction of what will happen in the future. But when we look at the future, even if the data helps us make an educated guess, it is still a guess.

Affordability will continue to be an issue in the Denver metro area as the cost of land and new construction increased with our home prices and most salaries didn’t keep pace. Buyers will continue to want more and more as they pay more and more. Sellers are going to have to do more to get their homes in tip-top shape to get top dollar. And  we are starting the new year with low inventory, low interest rates, a strong job market and a steady economy, we predict we will see continued long-term gains in real estate. Bring it on 2020!

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The post Greater Metro Denver Market Review appeared first on NeXstep Real Estate Group.