January 2024 Market Report

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For years, I've compared the process of buying a home to online dating, says the Denver Metro Association of Realtors’ Market Trends Committee.

The person, or house in this case, can look like your dream match online; however, until you physically tour the house -or meet your date in person — you really don't know if your online "crush" has the potential to be something more.

As we kick off the new year, buyers appear to be wearing rose-colored glasses, ready to put themselves back in the real estate market as they finally have more choices. New listings increased 14.73 percent to 3,280 year-over-year with a higher percentage of new listings for detached properties up 17.94 percent to 2,301. Pending home sales increased 6.5 percent to 3,294, while median days in MLS increased 5.88 percent to 36 days. Closed sales lagged by 6.26 percent; however, this isn't all that surprising as this number trails by a month highlighting homes that sold in January that went under contract in December. Saying that, this time of year I prefer to compare the numbers from last January to this January as December is traditionally our lowest month of inventory, resulting in highly skewed numbers such as an increase of 89.92 percent in new listings month-over-month.

Single-family pending sales rose 11.95 percent year-over-year while the median close price increased to $625,000. Median days in MLS stayed firm at 37 days and the percentage of close-price-to-list -price rose to 98.34 percent. While we don't track concessions here, I've heard more reports of competitive listings receiving multiple offers, so I think this number is an accurate representation. This is in contrast to the ratios last year that often reflected full -price offers which had large concessions to help buy down mortgage rates.

Attached pending sales decreased 6.61 percent year -over- year to 848 from 908, showcasing that attached sales are moving slightly slower. Closed sales also decreased 13.70 percent while the median close price remained the same at $395,000 -$25,000 less than the median sales price in December of $420,000. Additionally, median days in MLS increased to 34 days from 28 last January.

This month's big news is that the Fed did not adjust interest rates. As a result, we likely won't see an adjustment until spring at the earliest. When rates do start declining again, this will be much -needed relief and will also help to assuage some uncertainty with the presidential election this year.

The spring selling season will likely be strong this year due to pent -up demand and more favorable lending terms. While it's not a consistent prediction, if interest rates decline below five percent, we may see tighter inventory and more competitive scenarios once again. Many buyers are waiting on the fence for interest rates to continue their downward descent, however, trying to time the market for lower interest rates before the market heats up may result in buyers paying more in the long term if they find themselves in a bidding war. This is the importance of being an advisor to our clients helping them understand the risk and reward of waiting.