Metro Denver’s housing inventory is within the basement and common closing costs are at all-time highs
Buyers in the Denver metropolitan area can almost always count on a wider range of homes to be available when the weather warms, but not this year. The area’s inventory of homes for sale continued to decline last month despite rising mortgage rates, according to a monthly update from the Denver Metro Association of Realtors.
In a metropolitan region with more than 3.2 million inhabitants, only 1,921 houses and condominiums were for sale at the end of March, 5.1% fewer than in February and 66.7% compared to the previous year. Last month’s population decline was the sharpest since the beginning of March and the first February-March decline the area has seen since 2014.
It came despite a 26.7% increase in new additions compared to February. Sellers showed up only to be overwhelmed by the demand. A word to frustrated shoppers who have been waiting for the spring surge in inventory: it won’t happen. Instead, home prices are rising, adding to the despair of some buyers.
“In theory, this month’s report shows that if a buyer had waited just a month from late February to late March to buy a $ 500,000 property, they would have paid $ 35,000 more for that property “Said Andrew Abrams, chairman of the DMAR Market Trends Committee and a Denver Realtor, in comments on the report.
The average closing price of a single family home sold rose 5.7% from February to $ 560,000 and is up 15.5% over the past year. The average closing price reached $ 674,990, up 6.7% from February and a gain of 19.3% from March last year. Both numbers are all-time highs.
Average price increases for condos and townhouses were more modest, rising 4.6% month-over-month and 6.35% year-over-year to $ 353,000. The average closing price rose 4.4% and 8.2%, respectively, to $ 416,775.
The number of apartment closings skyrocketed 24% between February and March and rose 1.2% over the past year. Half of the single-family home offers last month were signed in four days and received 104.1% of the asking price, two more indicators of how hot the housing market remains.
Rising interest rates, which can reduce affordability and constrain demand, could weigh more heavily on markets as they continue to move higher. The 30-year mortgage rate started the year at around 2.65% and is now closer to 3.2%, according to FreddieMac.
“If rates keep rising, we could see buyers in the market dropping, resulting in a normalized market. The million dollar question is when? ”Asked Abrams.