Front Range Real Estate Market Update, January 5, 2023

Happy New Year! Last week we looked at predictions for this year. Today, we’re looking back to see what happened last year in Metro Denver. 

The most expensive home to sell in Metro Denver was in Cherry Hills Village and sold for $13,000,000. At 10,070 square feet, that’s about $1,290 per square foot. (The home is on 2.75 acres.) Take a look at the five most expensive homes that sold last year. 

In January and February, the market was very competitive. Well-priced homes were getting 20 or more offers. Buyers were waiving inspections, paying significantly more than asking prices, and offering free rent-backs for sellers. 

Things have changed.

In January, homes sold for an average price of $609,132 and a median price of $540,000. In December, homes sold for an average price of $637,852 and a median price of $554,990.

In other words, the average price of a home rose 4.7% from January to December. The median price rose 2.7%.

The average home sold in January spent 20 days in the MLS. Last month, it took 43 days for a home to sell, 115% longer.

In January, 2,847 homes were sold. Last month, 2,720 homes sold. That’s 4.5% fewer homes.

The big story in real estate since 2020 has been inventory. In January, there were 1,184 homes on the market at the end of the month. In December, that number was up to 4,757, about three times as many homes. So buyers have much more to choose from now than at the beginning of the year!

The other big story of the year was interest rates. 

The rapid pace of sales we saw at the beginning of the year peaked in the spring and then began to slow when interest rates started to rise. At the beginning of January, average 30-year mortgages were 2.41%. Now, they’re 6.5%. This is the steepest rise in rates ever. 

Now, sellers are in no rush to move and take on higher-interest mortgages. Buyers are looking at homes but are choosing which home to buy more carefully. Colorado is one of the top ten states where price reductions have increased as sellers adjust to the market’s new reality. In fact, as of December 28, 52.8 percent of homes for sale reduced their asking price. The market is becoming much more balanced and “normal.”

We’ll keep an eye on all aspects of the local real estate market and update you weekly. If there are facets of the market you want us to address, send us a message and let us know.