Metro Denver homebuyers had more homes and condos to sort through last month than they did a year ago, but those listings are going under contract faster and costing more, according to a monthly update from the Denver Metro Association of Realtors.
There were 5,849 homes and condos listed for sale at the end of March in metro Denver, up 6.1% from February and nearly 30% higher than a year ago. Supply remains under half the historical average of 13,376 listings for March, but as a point of reference, there were only 1,921 homes listed in March 2021.
About half of homeowners with a mortgage are sitting on a rate below 4%, according to the brokerage firm Redfin. If they sell, their next loan could be closer to 7% and that prospect has left many staying put in what are known as the “golden handcuffs.”
“As we head into the warmer months, sellers have resigned themselves to the elevated interest rates and have begun to take the golden handcuffs off,” said Libby Levinson-Katz, chairwoman of the DMAR Markets Trends Committee, in comments accompanying the report.
Levinson-Katz, also a Denver Realtor, said she sees more sellers choosing to downsize, either throwing the equity they have made to buy a smaller property outright or putting so much down they can get by with a smaller loan and reduced payment.
Last month, 4,932 new listings came onto the market, up from 4,242 in February and slightly below year-ago levels. It took a median of 11 days for a listing to go under contract in March compared to 23 days in February.
Buyers closed on 3,512 homes and condos, about 13.4% more than the prior month, but 13.4% fewer than a year ago. More sales are “pending” meaning they could come through this month or next. There were 4,317 of those compared to 3,272 in February.
Prices normally rise as activity heats up, and the gains seen last month are in line with seasonal changes, Levinson-Katz said.
The median price of a single-family home sold in March was $645,000, up from $630,000 in February and $620,000 a year earlier. That represents a 4% gain. The median price of a condo or townhome sold last month was $420,000, up from $405,900 in February and $409,000 a year ago. That represents a 2.7% annual gain.
Higher prices will make it even harder for entry-level buyers to get a place, given that mortgage rates have remained stubbornly high.
Someone looking to buy a typical starter home in Denver, which goes for $405,00, would need a household income of $127,808 to cover a monthly payment of $3,195 a month, according to a study from Redfin.
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