Metro Denver Real Estate Market Update, January 12, 2023

A reminder about insurance
As we start the year, we want to remind you to check your homeowner’s insurance and ensure you have adequate coverage. 

Last year, after the fires in Boulder County, many homeowners found they weren’t covered sufficiently. At the time, we suggested that you check your insurance coverage every year. The beginning of the year is a good time to do this. This article may be helpful for you.

Foreclosures
You’re going to hear news about foreclosures going up. Understand that foreclosure rates are still incredibly low. They’re increasing because there were so few foreclosures during the pandemic. Now they’re getting closer to “normal” historical levels.

Inventory
The number of homes for sale is increasing nationwide. Some parts of the country now have four months of inventory, which means that if no new homes came onto the market, it would take four months for all those homes to sell at the current pace of sales. 

In Metro Denver, things are different. Demand is high, and our inventory is pretty low compared to historic levels. 

Inventory reached a low point in January and February 2022, when we had just 0.4 months of inventory. That means it would have taken less than two weeks for all homes for sale to sell if no other homes came on the market. Those months’ meager inventory was a historic low for this area and much lower than national averages, which were around 2.3 months.

Inventory in Metro Denver rose to 2.1 months in September and October but was down to 1.2 months during December.

Are we headed toward a balanced market?
Home prices peaked in Metro Denver during April and have fallen fairly steadily since then. However, a lack of inventory has kept prices from falling even further. In addition, high interest rates have tempered demand for homes.

We’ll keep an eye on trends to see whether we can expect a “balanced” market during 2023. A balanced market is when buyers and sellers are evenly matched, and we have six months of inventory. We’re far from that right now in Metro Denver. A more balanced market would benefit buyers most because buyers would have more options, and homes would be more affordable than they are now. If interest rates decrease while inventory increases, homes will become even more affordable and we’ll see the market recalibrate entirely.