Metro Denver experienced a record surge in active home and condo listings at the end of May, while home prices were mostly flat, according to a monthly update from the Denver Metro Association of Realtors.
There were 9,159 homes and condos listed on the market on May 31 — 31% more than the 6,990 listings at the end of April. Compared to the 5,228 listings available a year ago, the inventory is up 75.2%.
Historically, the number of active listings has risen an average of 7.5% between April and May. But this year the inventory rose 31%, surpassing the prior record gain of 26.8% set in 2019.
While May’s percentage gain was a record, the number of listings would need to triple to approach the high mark reached in 2006 and would require another 63% gain to match the historical average for the month in records going back to 1985.
Libby Levinson-Katz, chairwoman of the DMAR Market Trends Committee, said in remarks accompanying the report that market forecasts had called for the inventory to stay flat as long as mortgage rates didn’t drop in a big way.
The thinking was that sellers sitting on 30-year mortgages below 4%, and even below 3%, had no financial incentive to list their properties and pay more to borrow for a new place. Only those in the “need to move” category, say for a job change, debilitating illness or divorce, would give up a once-in-a-lifetime rate.
“However, that doesn’t seem to be the case, as sellers have been not only stepping but jumping off the fence to enter the market for a variety of reasons,” she said.
The number of new listings went from 5,979 in April to 6,966, an increase of 16.5%. The annual gain in new listings, May vs. May, was 33.9%.
At the same time, the number of closings was not as robust. Sales rose 5.7% to 4,198 last month. But they are down 4.4% compared to May 2023 and pending sales, a measure of future activity, was up only 1.9%.
The median price of a single-family home sold dropped 0.26% from April to $660,000. It is up 0.53% over the past year. The median price for condos and townhomes dropped 2.8% to $407,250 and that median is down nearly 4.2% over the past year.
Levinson-Katz said condo and townhome owners have taken a three-pronged financial hit due to rising HOA fees, more association assessments and elevated property taxes. Higher home values are behind higher property taxes, while higher insurance premiums are passed through via higher HOA fees.
“Homeowners in the condo market are paying more to hold onto their properties. As a result, by and large, they are not appreciating as well as they once did due to buyer hesitancy to take on the financial burden,” she said.
Get more real estate and business news by signing up for our weekly newsletter, On the Block.
