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Front Range Real Estate Market Update, February 2, 2023

In some parts of the country, including San Francisco and San Jose, California, Phoenix, Las Vegas, and Seattle, home prices rose so quickly during 2021 and 2022 that homes became unaffordable. Prices rose so high that homes were out of reach for many people. The median income wasn’t high enough to purchase median-priced homes.

Home prices are falling dramatically in those markets, unlike in markets like St. Louis, Kansas City, or Chicago, where prices didn’t rise so much.

Trends in metro Denver are closer to those in San Francisco and Seattle than trends in Kansas City and Chicago.

In 11 counties surrounding Denver, the median sold price peaked in April at $625,000. Last month, the median price in these counties was $538,838, which is 13.7%, or $86,162 lower than in April.

If prices have fallen because homes weren’t affordable, how affordable are they now?

The answer is complicated, but we can compare typical monthly payments over the past few months to see whether homes are more affordable now than they’ve been.

Let’s assume a buyer makes a 15% downpayment and pays 2% in property taxes, HOA fees, and insurance. Since they’re putting 15% down, we’ll also include .375% for mortgage insurance per year.

The monthly payment for a home sold at the median price of $625,000 last April would have been $4,098.64. 

Last November, the median home price had fallen to $564,950, but interest rates were high. For example, a buyer may have gotten a rate of 7.21%. Here, the monthly payment would have been $4,354.49.

Affordability improved significantly in January, when a typical buyer may have purchased a home for the median price of $538,838, getting an interest rate of 6.09%, and had a monthly payment of $3,813.77.

Today, interest rates are at about 6.04%, and home prices are about the same as last month. As a result, homes are more affordable than they have been in many months.

Ready to make your move? Contact us now for expert guidance. Call 720-782-2468 or schedule a time for us to call you.

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Metro Denver Real Estate Market Activity

During the last week:
New Listings – 909
Back On Market – 229
Price Increase – 119
Price Decrease – 738
Pending – 1301
Withdrawn – 118
Closed – 837
Expired – 389

Previous Week:
New Listings – 846
Back On Market – 180
Price Increase – 92
Price Decrease – 691
Pending – 1156
Withdrawn – 98
Closed – 599
Expired – 172

Based on data from REColorado®

“Tom and David are very professional, The photography they work with was outstanding, They are very knowledgeable In the real estate market they knew right where to price my house for a good prompt sale and a great price, I must have called Tom a 100 times during this process and he answered the phone every single time, I highly recommend this team, And they donate some of their earnings to a non profit association for kids, 5 star company head to toe. I am a very pleased customer!”
– Gary G., Westminster

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