Colorado’s Housing Market: More Listings, Longer Wait Times
Colorado Homeowners Are Making Moves
After watching the real estate market from the sidelines, many Colorado homeowners are finally taking the leap and listing their properties. In March, new listings surged by 23.7% statewide and a staggering 30% in the Denver metro area compared to last year, according to the Colorado Association of Realtors.
But hold on—this influx of listings presents a double-edged sword. While buyers now have more options than before, houses are lingering on the market longer. The current inventory of homes for sale has risen to 2.9 months, an increase from 2.5 months one year ago. On top of that, the average time to sell a home has crept up to 64 days—a whole week longer than the 57 days we saw in March 2024, despite mortgage rates that had been higher back then.
A Shift in Buyer Behavior
The dynamics of the market have undeniably changed. As Cooper Thayer of The Thayer Group in Castle Rock aptly describes, “The market does feel slower compared to the super competitive market a few years ago.” However, this calmer environment allows buyers to adopt a more thoughtful approach to their home search. The frenzied pace of spring 2022 created undue stress for buyers forced into making rapid decisions. According to Thayer, the current market provides breathing room for potential homeowners to weigh their options.
Buyers Exercising Caution
When homes sit on the market for extended periods, the implications for pricing are significant. The median sales price in the Denver area has only ascended by 0.8% to $625,000. Statewide, the increase is slightly better at 4.7%, landing at $575,000.
This shift in the market has opened the door for buyers to be more discerning. As Sunny Banka, a Realtor in Aurora, states, "Not only do buyers have more choices at basically the same price, they also have longer to think about their choices." Some buyers are even seeing lower interest rates—with FHA loans hovering around 6%, down from previously soaring levels of 7% or 8%.
The Role of Economic Factors
However, the slow sales can’t be attributed to the increase in inventory alone. Kelly Moye, an agent in Boulder and Broomfield, points to broader economic conditions. Buyers are hesitant due to interest rates and a lack of consumer confidence, which she suggests is impacting demand. She mentions, “I don’t think that sellers are stubborn about selling or holding on to high list prices; the market is slow due to external economic factors.”
Realtors are responding to this market sluggishness with various strategies. Moye notes that sellers are increasingly making concessions to attract buyers—like reducing prices or assisting in buying down interest rates. In Boulder County, buyers are paying approximately 98.3% of the list price, while the Denver metro area sees a slightly higher figure at 99.3%.
Varied Market Trends: A Tale of Two Sectors
While the overall housing market experiences longer wait times, condominiums are facing unique challenges. Many buyers are turned off by skyrocketing ownership costs spurred by escalating insurance premiums, which in turn inflate monthly condo fees.
In Evergreen, where new condo listings spiked by 42.5%, the median price of condos dropped by 5% to $403,750. Interestingly, while 26.1% more condos and townhomes were listed last month, sales fell by 4.3% statewide. In the Denver metro area alone, there was a 6.8% decline in sales, with the overall median price for condos dipping to $390,000—reflective of a broader pattern of lower demand amid rising costs.
Out-of-State Interest in Colorado Homes
Despite the fluctuations in the local market, one trend remains clear—the desire to move to Colorado persists. According to insights from Zillow, 60.5% of home searches in Denver originate from residents already in the city. Meanwhile, interest is also notable from outside Colorado, particularly from potential homebuyers in Phoenix, Los Angeles, and Dallas, all vying for a slice of the Colorado dream.
Conclusion: A Market in Transition
The Colorado real estate landscape is currently characterized by abundance and caution. With a boost in inventory and time on the market stretching longer, both buyers and sellers are navigating a shifting terrain. While buyers can rejoice in greater options, the need for prudence remains paramount as economic uncertainties linger. Only time will tell how these trends will play out in both the housing and condominium markets in the coming months.
