Notes From the Field (April 2024)

Spring is in the air! Yards are greening up, neighbors are out, and home sellers are coming to market. Early April data suggests we'll finally see new listings tick up, but how will buyers react to higher mortgage rates?

In March, we saw 3,771 new listings and 3,371 pending sales, showing that buyer demand almost equaled the new supply. However, even though demand has remained relatively strong and inventory levels remained low, the first half of April saw more price drops than any other time this year.

Let's dive into the numbers:

 

• Median home price (excluding condos or townhomes) rose to $650,000 in March, up 4% compared to last year and up slightly MoM

• New listings are increasing, but are still slightly lower than at this time last year (-1%); the # of total listings on the market is also lower (-2%) than in March of 2023

• Buyers are acting fast, with 10% more sellers accepting offers in March than last year. Though still below expectations, it marks a positive shift from the market stagnation experienced in 2023.

• Median time on the market fell to just 10 days.

 

 

 

ResiClub recently released data showing the distribution of rates among existing homeowners in America. Because the US is unique in using a long-term, fixed-debt approach to home loans (unlike many countries), most homeowners have a rate and payment they can enjoy for decades unless life circumstances require them to make a move.

 

 

The NAR will pay $418M in damages to settle allegations it conspired to increase commissions. The proposed settlement also requires buyers' agents to sign agency agreements with its clients defining their brokerage relationship and how they'll be paid (in Colorado, this has been the case for years) and prohibits most MLSs from publishing offers on compensation for buyers' agents.

We are still unsure how this settlement will impact how people buy and sell homes. However, we believe most people still want someone on their side during this massively complex and deeply personal financial transaction.

Some headlines suggest that commissions will be slashed or that home affordability will improve following the settlement, but we just don't think either is likely true. 

One outcome we can get behind is knowing that commissions will be discussed with greater transparency going forward. While commissions have always been negotiable, it was previously rare for buyers to discuss or negotiate their agent's compensation. 

Going forward, both buyers and their agents (not to mention sellers) will be much more aware of both how the agents are compensated and importantly what their role is in helping buyers throughout the home buying process.

 

Remember, real estate is local! The data in this newsletter reflects the broader Metro Denver market. If you would like to take a deeper dive into your neighborhood and local market conditions, please give us a call. We love researching and sharing information so that you can make informed decisions.

Thanks for reading!