May 2022 showed a tale of two markets, with detached median and average prices not increasing at the same rate as attached but still representing a very hot market overall.
After consecutive months of appreciation, negotiations and bidding wars, modest numbers this month became a sign that the market has returned to a semblance of ‘normal.’ The housing market ended May with 3,652 properties on the market, representing an increase of 448 properties from the previous month, which is seasonally on trend. Closed sales increased 3.75 percent from the previous month, keeping supply and demand relatively balanced.
The attached and detached markets had a similar balance of supply and demand in May. Both markets had the highest number of standing inventory in the $500,000 to $749,999 price points. The biggest difference was the proportion of inventory. For attached properties, that price range made up 29.87 percent of the market and for detached properties, it made up 41.72 percent of the market. There are over four times more single-family detached properties between $500,000 and $749,999 than attached properties.
“As summer approaches, and Denver continues to see a shift from the peak of the real estate market, we will see changes in how the market operates compared to the beginning of the year,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “ Denver Metro’s housing market will be the story of two halves. The first of the year with unprecedented appreciation and the second half of the year with a return to normalization. The effects of higher interest rates have not been visible yet and most likely will not be seen until after the summer. This could translate to more inventory, lower or flat prices and longer days in the MLS. Because of the build up of buyers and low inventory, buyer demand has continued to outpace supply for now.”
Throughout the entire market, year-to-date, the market has seen 7.18 percent fewerhomes closed than the previous year. Even with fewer purchases, the market has transacted over $1 billion more in sales volume than the previous year, indicating how high prices have soared from the previous year. This is also indicated in the close-price-to-list-price ratio of105.33 percent, down from the previous month.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999).
In the Luxury Market, buyers saw their options increase in May. Like the other price segments, inventory went up 5.86 percent from April and a significant 65.95 percent higher than the same month last year. Pending sales were also up, along with closed sales and sales volume as well. More choices turned into more pending sales, up 22.20 percent month-over-month and up 27.37 percent year-to-date.
Detached homes sold for an average of 107.12 percent of list price, down slightly from April’s 108.39 percent but up 2.81 percent from the same month last year. Meanwhile, the attached condo and townhome Luxury Market is currently the softest of all price ranges and home types, selling at 104.94 percent of list price.
“Today’s luxury buyers are willing to put it all on the table to get the home they want,” said Jill Schafer, DMAR Market Trends Committee member and Metro Denver Realtor®. “Like other segments of the market, it appears agents are putting luxury properties on the market and allowing showings for a few days and sifting through the offers to go pending in a median of four days.”
The attached Luxury Market has the largest months of inventory of all price ranges at 1.73, still a seller’s market but not as strong as other areas. Overall, luxury closings were up month-over-month and up even more year-to-date with detached closings up 36.10 percent and attached homes up 10.92 percent.