Metro Denver shoppers can almost always count on more homes to choose from in warmer weather, but not this year. Despite rising mortgage rates, the number of homes for sale in the area continued to decline last month, according to a monthly update from the Denver Metro Association of Realtors.
In a metropolitan area with more than 3.2 million inhabitants, only 1,921 houses and condominiums were for sale at the end of March, a decrease of 5.1% from February and 66.7% from the previous year. Last month’s inventory decline was the largest since March and the first February-March decline in the region since 2014.
It came despite a 26.7% increase in new car registrations compared to February. Sellers showed up only to be overwhelmed by the demand. A word to frustrated shoppers who campaigned for the spring inventory spike: It won’t happen. Instead, property prices are rising, adding to the despair of some buyers.
“In theory, this month’s report shows that if a buyer waited just one month to buy a $ 500,000 property from late February to late March, they would have paid $ 35,000 more for that property,” said Andrew Abrams, chairman of the DMAR Market Trends Committee and a Denver Realtor, in comments on the report.
The median closing price of a single family home sold rose 5.7% from February to $ 560,000 and is up 15.5% over the past year. The average closing price reached $ 674,990, up 6.7% from February and up 19.3% from March last year. Both numbers are all-time highs.
Average condominium and townhouse price increases were more modest, increasing 4.6% month-over-month and 6.35% year-over-year to $ 353,000. The average closing price rose 4.4% and 8.2%, respectively, to $ 416,775.
The number of housing closings rose by 24% between February and March and by 1.2% last year. Half of the single-family home listings last month signed in four days and received 104.1% of the listing price, two more indicators of how hot the property market remains.
Rising interest rates, which can reduce affordability and limit demand, could weigh more heavily on markets depending on how fast they continue to rise. The interest rates on a 30-year mortgage started the year at around 2.65% and are now closer to 3.2%, according to FreddieMac.
“If interest rates continue to rise, there may be a drop in buyers in the market, resulting in a normalized market. The million dollar question is when? “Asked Abrams.