Sharp Decrease in Home Sales as 2022 Ends

Denver’s once frenzied housing market came to a screeching halt at the end of 2022 as mortgage rates continued to climb. As the year ended, sales plunged to their lowest levels in a decade and annual price gains for single-family homes, once in the 20% range, essentially fell flat.

According to a monthly update from the Denver Metro Association of Realtors (DMAR), the number of home and condo sales fell to 2,720 in December, a 43.1% decline from December 2021. Despite a strong first half, 2022 ended with 50,743 closings in metro Denver, a fifth fewer than in 2021 and the slowest pace since 2012, when the market was shaking off the housing bust.

In the report, Amanda Snitker, vice chair of the DMAR Market Trends Committee said that the post- pandemic shift back to a more normalized market will take some time. She noted that surging mortgage rates, which went from just over 3% on a 30-year loan at the start of last year topped 7% in the fall and then settled back into the mid-6% range in December, accounted for much of the shift in the market.

The median price of a single-family home sold in December was $600,000, which was only $30 higher than the median sales price in December 2021. That 0.1% increase is way short of keeping up with the 6.9% annual rate of consumer inflation in the region in November. Condos and townhomes did better, with the median sales price rising 5.74% last year to $405,000.

Another sign of the lack of circulation in the market is the average of 43 days listings took to sell in December. That is up from 34 days in November and 18 a year earlier. Back in May listings were flying off the shelf, going under contract in an average of nine days. Measured at the median or midway point, it is taking a listing six times as long to sell as it did a year earlier.

One thing that has not changed over the course of the year, more or less, is inventory. Supply has increased a bit overall; however, there were 4,757 active listings on the market at the end of December, which is down nearly 24% from November’s 6,253 listings. That seems to be a drastic change, but the typical drop between the two months is 21.4% as sellers go into holiday mode. Currently, available listings are up 222% from a record low 1,277 listings in December 2021.

It will be interesting to see how the new year impacts the behavior of buyers and sellers, especially as we all keep an eye on interest rates. Could this be the year you become a homeowner? Or a home seller? Contact Metrowest today – we’d love to help you explore your options!