2022 Denver Area Real Estate Summary

To say 2022 was a wild ride for our real estate market would be an understatement. Home prices in May, 2022 were averaging over 16% above home prices in May, 2021. But by December, 2022, the average home prices were only 11.5% higher than December, 2021. For 2022 the number of home sales was down over 20%, the number of new listings was down over 9%, and the days on the market was up 20% compared to 2021. To top everything off, interest rates bounced up over 7% toward the end of the year. Sounds pretty bad, right? Here is the good news:

Our home prices are still up 11.5% from 2021;

Interest rates recently dipped below 6% into the mid-high 5% range (sure it isn’t 3% or 4% but don’t hold your breath for those rates);

The number of homes that went under contract increased dramatically after Christmas, and still continues to increase. I interpret that to be a sign of the beginning of a recovery in our market;

Economic and mortgage “experts” are saying that by the end of the 2nd quarter of 2023, or maybe sooner, interest rates will be more stable and the housing market will pick up again. I anticipate that we will see interest rates in the low-mid 5% range;

During the peak of the market (before the May slowdown), there were typically 3-8 offers on every home. That means there were a lot of buyers who didn’t get the house they wanted and when interest rates drove them out of the market, they stayed put wherever they were. Most of those buyers still want to buy a home and I believe a lot of them will start coming back into the market in the next couple months, and finally;

Home prices are estimated to increase 3-5% in 2023. That is a stable, normal market for the Denver area.

I hope this information is helpful, and encouraging. I realize it is generalized for the entire Denver Metro Area. If you have questions about your local real estate market or the value of your home in today’s market, please don’t hesitate to contact me.