Activity Remains Stagnant in December
According to Megan Aller with First American Title, “The week between Christmas and New Year’s is historically the slowest week of the year.”
December turned out to be the slowest month of 2022 with days on market jumping to 43. The number of listings that found a buyer (i.e., went under contract) dropped to 2,325—down from 3,321 in 2021.
Fewer Homes Hit the Market
According to the Denver Metro Association of Realtors (DMAR), “The number of new homes that entered the market in December decreased from November by 35.19 percent, which is typical that the market sees a seasonal decline in new listings as sellers pulled back to focus their time and energy on the holidays.”
Demand Has Slowed Significantly
DMAR reported the following stats for Denver Metro’s 11 Counties in December 2022:
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- 1,735 new listings came to market, down from 2,662 in 2021
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- Homes appreciated year-over-year by only +1.58 percent on average
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- Month-over-month, prices are down -2.69 percent
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- The average home sale price in Denver Metro was $637,852
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- We ended the month with 4,757 homes for sale, down 23.97 percent from December 2021
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- The average home is taking 43 days to sell
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- Only 2,325 homes went under contract
What this Means for Home Sellers
- While new listings hit their lowest number all year, overall active listings are up a dramatic 222.07 percent from this time last year
- With fewer buyers actively purchasing properties and inventory on the rise, you will face stiffer competition and may need to get creative to sell your home
- According to Megan Aller with First American Title, 59.4 percent of sold detached single-family homes had price reductions. These averaged a -7.8 percent drop from their original list price
- At Usaj Realty, we believe that working with a qualified and value-driven real estate agent is more important now than ever before. Our agents are ready to help you get the most money for your home
What this Means for Home Buyers
- You have the upper hand! With higher levels of inventory, less competition than we’ve seen since before the pandemic, and over half of homes seeing price reductions before they sell, you can negotiate for a great deal
- It is crucial that you find a dependable local lender in today’s climate as they may have access to some unique lending opportunities. Usaj Realty can assist you with some recommendations
- Prices are very similar to what they were last year, and appreciation may end up being much more meager in comparison to the pandemic years. December prices were down -2.69 percent from November
Overall Picture + 2023 Predictions
Prices
Despite the huge price hikes of recent years, a reprieve for would-be homebuyers is in sight for early 2023—unless interest rates take an unexpected dip. With the lack of new construction, and pent-up demand from millennials, prices aren’t likely to take a huge dip but high rates could very well drive them down for the first few months of 2023.
According to DMAR, “For both detached and attached homes, the peak median sale price for 2022 occurred in April, $680,000 and $440,000, respectively.”
Interest Rates
If inflation can stabilize, we will see rates drop at some point in 2023. According to Nicole Rueth with OneTrust Home Loans, the average mortgage rate in 2014-2019 was 4 percent so we could expect to see rates stabilize in the ballpark of 5.5 percent sometime next year. The days of 2.75 percent interest rates are not likely to return given the current economic reality.
10-Year Low for Number of Units Sold
In 2022, the Denver Metro area’s home sales reached a 10-year low. According to Megan Aller, 48,229 homes sold in 2022 in the Denver Metro area (Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert, and Jefferson.) The last time numbers were that low was in 2012 with 43,079 homes sold.
December Numbers Over the Years:
| Avg. Days on Market | Avg. Sold Price: Single Family Home | Avg. Sold Price: Condo | # of New Listings | # of Homes Sold | # of Homes Pending | Avg. Sold Price Change YOY | Dec. 2017 | 48 | $484,596 | $342,754 | 2,353 | 3,900 | 3,120 | + 12.34% | Dec. 2018 | 39 | $508,016 | $350,176 | 2,300 | 3,396 | 3,226 | + 4.70 % | Dec. 2019 | 41 | $530,715 | $372,877 | 2,558 | 4,195 | 3,540 | + 4.93 % | Dec. 2020 | 23 | $616,895 | $391,375 | 3,028 | 4,807 | 3,625 | + 13.47 % | Dec. 2021 | 18 | $705,753 | $441,390 | 2,652 | 4,504 | 3,321 | + 15.82 % | Dec 2022 | 43 | $707,997 | $469,505 | 1,735 | 2,720 | 2,325 | + 1.58 % |
Source: DMAR
Average Interest Rates by Year in Denver
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |
| Avg. 30-Year Fixed Interest Rate | 3.67% | 3.98% | 4.46% | 3.91% | 3.11% | 2.96% | 5.33% |
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
| Avg. 30-Year Fixed Interest Rate | 5.04% | 4.69% | 4.44% | 3.66% | 4.02% | 4.16% | 3.84% |
Data courtesy of Megan Aller | First American Title
Read Denver Metro Association of Realtors’ full report on last month’s Real Estate trends and statistics in Denver here.
And as always, please let us know if you have any questions!
Whether buying or selling, Usaj Realty is dedicated to helping you stay competitive. Your Usaj Realty broker will communicate effectively, learn your goals like the back of their hand, work closely with you to negotiate the best terms possible, and expertly manage your transaction from start to finish, ensuring peace of mind.