- Average close price fell 3% from november as buyer activity slowed over the holidays and homes were on the market 26% longer.
- While active inventory saw a 24% drop from the previous month, it is up 222% from the record low at this time last year.
- Interest rates closed the year at 6.42% (per freddie mac) after breaking the 7% threshold in the second week of november.
Looking Back on 2022
Looking Ahead to 2023
Interest rates are front of mind for many potential buyers because of the wild swings in 2022. There is good news here if you are following along with economists and experienced lenders — they expect we already hit the highpoint last November and that rates will drop below 6 and into the mid-5s by early summer. This will bring back many of those buyers who were previously priced out of the market.
More good news for those buyers is that they will see home prices drop a little more in the year ahead, though we are unlikely to see a significant increase in options. About 85% of homeowners in Denver Metro have interest rates below 5%, which means they are unlikely to sell and purchase at a significantly higher interest rate unless it is out of necessity.
And for those homeowners who read the last paragraph and thought to themselves, “wait, how much will home prices drop?”… it is not expected to be much. Denver Metro has been one of the top performing markets nationally for the past few years, and these are the markets the National Association of REALTORS®(R) expects will see a slight drop-off, maybe around 5%, and certainly not enough to eat into the historic appreciation from the past few years.
It will be a challenging year for real estate professionals, from title companies to lenders to agents, as we will likely see a 10% drop in closed transactions and an even greater drop in home refinances within Denver Metro in 2023. This comes off the heals of a 21% drop-off in closed transactions from 2021 to 2022.
Pick Nick to Guide You Through
Those who know me know that I am a big proponent of renting your home when you purchase the next one but that is not for everyone. If you are looking to sell, you will want to work with an agent who understands the housing market and can help you to get the most money for your home. Let me show you how I can do that for you.
Navigating any market successfully is about finding and creating opportunity. This is where I specialize and no matter where you are in your real estate journey, I am happy and excited to guide you through.