Buyers and sellers shelter in place as home sales slow across the state

Although increases in inventory are helping to restock what were nearly empty cupboards across the Denver metro and statewide housing markets over the past few years, the typical year-end housing slowdown is being fueled by some interest rate uncertainty, as well as speculation and hope for what spring 2023 may offer to patient buyers, according to the November 2022 Market Trends Housing Report from the Colorado Association of REALTORS^®.

While there is still a sound and growing number of opportunities for buyers, the activity and pace of eager buyers and sellers have taken a much-needed break as parties on both sides seem content to let the holidays play out and see what the new year may bring.

“The lack of inventory and the hike in interest rates are causing some sellers and buyers to shelter in place. Sellers may not want to sell because they might not want to give up their low interest rate or worry about where they would go if they did sell; buyers may have discovered they can no longer afford to ‘move up’ or purchase at all with the higher interest rate and mortgage payment,” said Steamboat Springs-area REALTOR^® Marci Valicenti.

The slowdown can be seen across multitude of categories with numbers that are a far cry from the market frenzy a year prior when it comes to pending/under contracts; sold listings; average days on market, active listings, and the overall months supply of inventory. Despite the swings, median sales pricing continues to rise across all property types, keeping the CAR Housing Affordability Index at or near its record lows.

Looking at the seven-county Denver metro area across all property types (single-family and condo/townhome):

Statewide market across all property types (single-family and condo/townhome):

REALTORS® across the metro area and state shared these highlights (expanded summaries of each market are included in the following pages):

• Aurora – The condo market seems to be much hotter than a year ago or even from just a couple months ago. Given the high prices of housing and rents, condo sales are up, and pricing is up on condos in most zip codes. Perhaps consumers are finding an affordable alternative to single-family houses.  
• Boulder/Broomfield counties – The lack of homes on the market and higher interest rates have kept buyers on the couch, so closed sales are down over 20% since last year. Sellers who want to move are holding on tightly to their low interest rate noting the change in payment if they move would be significant. Buyers are shellshocked by the rate hikes and are choosing to rent to ‘watch and see what happens.’ Gridlock.
• Colorado Springs – Winter is here, for housing too. Shell-shocked sellers are still trying to figure out how they missed the top, and when will the market rebound? The simple answer is, they did miss the top and the market is not likely to rebound. Overall, sales for all properties dropped 37.7% year over year. Active listings jumped 122.7%, and pending sales fell 25.3% for single-family homes and – 43.2% for townhomes/condos. It’s going to be a bumpy ride in 2023.
• Denver County –We are four months in to the unofficial 2022 course correction in Denver’s real estate market. We saw the year-over-year median prices dip in August to the single digits from their 2021 high of 29%. This is also the same period that prices dipped below their pinnacle for 2022 at $750,000. Now, at $675,000 for a freestanding home in Denver, calculated on the median, it’s plainly arguable that despite the higher rates, it remains less expensive to buy a home now than it was last year. 
• Douglas County – An unexpected twist, single-family home prices actually increased 3.6% in November, the first monthly increase in prices since April. Days on market continued to trend upwards, increasing from 37 to 43 days, the highest level since February 2020. Inventory also continued to tighten, decreasing about 14% during the month. The strange combination of low inventory and relatively high days on market makes for an interesting market, and balances out negotiating power between buyers and sellers.
• Durango/La Plata County – Low inventory levels continue to push prices to all-time highs. La Plata County median home price climbed to $827,000 in the month of November, a 12.5% increase over last year. With increased mortgage rates and historically high home prices, affordability is a major concern for buyers. Many buyers are being forced to the sidelines, waiting for rates to soften and prices to stabilize.
• Estes Park – The market has definitely shifted and, while homes are still selling, it’s just not quite like before. New listings continue to dwindle, down 24.1% for single-family homes from November last year with townhouse/condos down 22.8% year to date. Single-family homes reached an average $668,734 a 14.1% increase year to date. Townhouse/condos average sales price has reached $469,389, a 22.4% increase from November last year.
• Fort Collins/Northern Larimer County – How do you respond to the current housing sales market? Try this: Relax – that’s exactly what the Fed is going to do eventually. Breathe – enjoy this pause in the frenetic pace of what the housing market has been. Be patient – if you are prepared for interest rates to drop this spring – even to just under 6% – there will likely be a resurgence of buyer appetite.  Be Kind – it’s been a year fraught with challenges. Find ways to be kind to those around you. It really is contagious.
• Glenwood Springs – The market in the Roaring Fork and Colorado River valleys remains strong despite uncertainty in the stock market and the rise in interest rates. New listings continue to be scarce keeping sellers optimistic and prices stable. The single-family median sale price was up 34.1% to $755,000 while the multi-family sector saw a slight, 2.7%, bump to come in at $365,000.
• Grand Junction/Mesa County – Sold listings for single-family homes fell nearly 42% from November 2021 to 2022 and just over 58% for townhomes/condos. Interestingly, median and average prices in both categories are up, so sellers are not reducing prices significantly. Instead, they are offering buydowns and closing costs as incentives. The single-family average home price reached $443,900, a new high for Mesa County.
• Jefferson County – Interest rates increases have pushed some buyers out of the market. Solds for single-family homes fell 47.4% from a year prior however, the median sales price still ticked up 2.9% from a year ago to $640,000. Days on market is nearly double (34 days) compared to this time last year (18) another clear indication that sellers must price their home correctly if they want to sell quickly.
• Pueblo – Activity continued to slow in November with new listings down approximately 25% with 116 fewer listings than in November 2021. Pending sales were down 43.3% compared to last November nearly matching the big drop in sold listings, which were down just shy of 47%. That said, our median pricing is holding up at $311,950, a 10.6% increase for the year.
• Steamboat Springs/Routt County – The lack of inventory and hike in interest rates are causing some sellers and buyers to shelter in place. Sellers may not want to sell because they might not want to give up their low interest rate or worry about where they would go if they did sell; buyers may have discovered they can no longer afford to ‘move up’ or purchase at all with the higher interest rate/mortgage payment. 
• Summit, Park and Lake counties – Last year, we were busy saying prices were going up, up, up. This year, we’re saying prices are going down – kind of. Logic says interest rates heavily impact the market. We found this logic to be true when interest rates were so low. Now, logic says interest rates going up should bring our prices down, but we continue to see YTD average prices for 2022 above 2021 for Summit, Park and Lake counties. Rates up, prices up and sales volume down – not quite what we expected.
• Telluride – October and November sales were down significantly compared to the first nine months of 2022. The 33 November sales were the lowest number of sales in that month since 2011. Dollar amount of sales was down in Telluride, the Mountain Village, and the remainder of San Miguel County, -16%, -12% and -18%, respectively. However, in all three sectors, the average sales prices were up with Telluride up 20%, Mountain Village up 37%, and the remainder of San Miguel County up 27%.
• Vail – With a 50% inventory increase compared to November 2021 and a 114% increase in months supply, market conditions certainly offer buyers more flexibility in their search. Even though the inventory is below historic levels, it is almost double where it had been and can offer buyer opportunities.