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Thursday, February 22, 2024

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What happened in Denver's housing market in 2023

Data: Redfin; Chart: Alice Feng and Tory Lysik/Axios Visuals

Two-decade-high mortgage rates and an inventory crunch shaped Denver’s 2023 real estate market.

Why it matters: A year that saw record-low housing affordability is coming to an end.

What they’re saying: Buyers and sellers had a tough time in 2023. “As buyers faced higher monthly payments due to these rates, sellers experienced a decline in the number of offers received,” Denver-based agent Ryan Belinak tells Axios.

  • Sellers also had to offer concessions, like mortgage rate buy-downs, which shrunk their net profits, Belinak says.

Yes, but: The “unsustainable” home value appreciation and competitiveness we saw through 2022 finally slowed, Belinak notes.

  • If you could buy in 2023, conditions were calmer.

By the numbers: Home values are up less than 1% from this time last year, and down from their April 2022 peak, per DMAR figures.

  • Home sales have slowed 14% from November 2022 to 2023.
  • Homes sold in 38 days on average in November — four days longer than this time last year.

Zoom out: U.S. home sales have cratered as many homeowners clamp down on their lower mortgage rates.

  • “If there’s nothing out there for me to buy, why would I sell? We are all kind of stuck in that paradigm right now,” chief economist Matthew Gardner at Windermere Real Estate said at a November conference.

What we’re watching: Mortgage rates would need to slide significantly to loosen homeowners’ golden handcuffs and boost listing activity, real estate experts say.

  • America’s housing shortage is particularly concerning for the wave of younger millennials and Gen Zers in the homebuying pipeline, Gardner said.

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