Limited inventory keeps Denver home prices high

The Denver metro real estate market continues to struggle with limited inventory, with the number of available properties listed in February at 3,778, down 8.3% from January but up 208% over February 2022.

That limited inventory continues to keep prices high. February’s median closed price of $562,500 is up 4.4% from January but down 2.2% from a year earlier.

Properties are staying on the market longer, with the average days available at 48, up 4.4% from January.

“Year over year we see Denver’s most active market falling in the months of February through May and we are on trend for this year to follow suit,” says Anna Centron, a broker associate at The Agency Denver.

“Higher interest rates are not deterring buyers. We are back to seeing multiple offers within the first weekend of properties being active on the market that are correctly priced or lower priced (of market value). With many lenders offering free re-financing options, along with the assumption of interest rates going down next year due to being an election year, buyers are jumping!”

Return to buying frenzy?

Despite higher interest rates, sellers see more showings per listing.

“Buyers are watching rates closely and patiently waiting for new inventory to hit the market,” says Libby Levinson-Katz, chair of the Denver Metro Area Realtors Market Trends Committee.

“They are more discerning about home prices, less willing to compete and will only jump into a bidding war if the house is move-in ready and suits their needs.”

But some buyers are ready to compete, says Olivia Merrill, broker associate at The Agency in Denver.

In one case, she had a buyer compete for a home in Denver’s Harvey Park neighborhood who lost in a bidding war despite removing an inspection objection, offering $30,000 over the list price and $15,000 in appraisal gap coverage.

“The seller ended up receiving 32 offers and went with an all cash offer,” Merill says.

She also had a buyer lose a bidding war for a home in Littleton listed for $840,000.

“We offered an escalation of up to $925,000, with up to $40,000 in appraisal gap coverage and lost the offer. The seller ended up getting eight offers on the home,” Merrill says.

Luxury market stays strong

The luxury market continues to be hot in February, with a 61% increase in new listings compared to the previous month. Closed sales were strong at 241 for the month, up 24.5 percent from January and 28 percent over February 2022.

The median days on the market dropped to 23 from 47 in January, but that’s still up from 5 days in February 2022.

Colleen Covell, market trends committee member, says luxury sellers received 98% of their list prices. That compares to 96% in January and 106% last February.

“The luxury market defied the headlines reciting a plummet in home prices, with both detached and attached homes enjoying significant appreciation month-over-month, as well as year-over-year,” Covell says.

She adds that rising interest rates haven’t cooled the luxury market since many buyers are cash buyers.

The three priciest sales in February were cash deals in Cherry Hills Village, with a 10,000-square-foot home at 37 Sunset Drive selling for the highest price at $8 million.

The news and editorial staffs of The Denver Post had no role in this post’s preparation.

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