April 2023 data shows a housing market that is still yearning for more inventory.
New listings dropped 6.71 percent month-over-month to 4,758, a decline of 30.94 percent year-over-year. Pending sales increased 10.51 percent month-over-month to 4,489, while active listings at month-end rose slightly to 4,620 properties. Median days in MLS dropped from 10 days to seven, showcasing how quickly the market is moving again.
Traditionally, in the spring selling season, the market sees an increase in both active listings at month-end as well as new listings. The sluggish movement in these categories, however, leaves a lot to be desired. The market segments with the largest jump in inventory are currently the detached segments of the Luxury and Signature Markets, with over a 4.5 percent gain.
The median price rose from $566,000 in March to $580,000 in April, which is considerably lower than the median price of $617,000 this time last year. As we know, this time last year was a different story when bidding wars escalated over 10 percent above the list price resulting in a 106.87 close-price-to-list-price ratio. This escalation has calmed with a 100.21 close-price-to-list-price ratio, showcasing more stabilized pricing.
“We have been eagerly waiting to see how the spring market would perform and inventory remains extremely tight as homes go off the market almost as quickly as they become available,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “The inventory decline in an already tight market raises some concern as to what the rest of the year has in store for the Denver Metro market. Affordability took a hit with the rollout of tax assessments, reflecting sizable increases to property tax bills across the state. The state average is 33 percent; however, some areas increased by more than 60 percent. Higher tax bills coupled with increased interest rates are going to have a significant impact on buyers’ ability to purchase throughout the state, specifically the Metro area.”
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).
This April, the Luxury Market saw an average close price drop from $1.64 million to $1.61 million. Average days in MLS improved, but the 5.88 percent decrease fell far behind other market segments that decreased by no less than 21.95 percent. Close-price-to-list-price ratio remained under 100 percent, at 99.23 percent, while other price segments saw homes close, on average, above list price.
“To properly assess the Luxury Market, a buyer or seller needs to consider that it is the smallest segment, making up 11.62 percent of April sales in the Denver Metro area, and has the smallest buyer pool,” said Nick DiPasquale, DMAR Market Trends Committee member and Metro Denver Realtor®. “Covering any home $1 million or higher, the Luxury Market has no upper limit and is susceptible to price swings larger than the other market segments combined.”
Overall, the Luxury Market is trailing the hectic pace of 2022 and on par with 2021. The market is much more active than in the years leading up to the pandemic. In April, new listings saw a decline of 4.38 percent, while median days in MLS increased by two days, from seven to nine. The number of pending homes, up 4.52 percent, and closed homes, up 4.12 percent, were both on the rise, keeping the Luxury Market steady with the quickened pace seen in March. While the frenzy of last year is unlikely to return, the Luxury Market in Denver Metro remains strong and may be the most balanced of the local markets, with a slight lean toward sellers.