DENVER — Overall economic uncertainty and an increase in property taxes continued to impact Denver’s real estate market in April in a number of key factors, leading to fewer available homes for potential buyers as homeowners hold onto current mortgages with lower interest rates.
The monthly Denver Metro Association of Realtors report showed in April, new listings fell nearly 7 percent from March with 4,758 available properties, which is also a decline of almost 31 percent from April 2022.
"The spring market is really sluggish. We were expecting it to have a better start of the year and we are really lacking inventory right now," Libby Levinson-Katz, Denver realtor and DMAR Market Trends Committee Chair told Denver7.
“This time of year typically we see inventory start creeping up and we just aren’t right now."
As buyers, sellers and realtors in Denver try to make sense of the current economic picture and how spring real estate market will play out, the report also showed the metro area continued to see a drop in the median home price from this time last year.
In April, however, Denver metro’s median home price rose by $14,000 to $580,000 from $566,000 in March.
The median home price in Denver is still nearly $37,000 less that it was at this time last year.
While the report showed a mixed-bag of statistics for buyers and sellers, Denver real estate experts highlighted the lack of inventory as a main force driving the spring housing market.
‘We have been eagerly waiting to see how the spring market would perform and unfortunately, inventory remains extremely tight as homes go off the market almost as quickly at they become available,’ said Katz.
It's a consideration for many Coloradans thinking about putting their home on the market.
"My advice for sellers if if you're looking at selling your property, it's an amazing time to do that," noted Katz. "There's buyer demand out there. They're just waiting for the right house and yours might be the right house."
An already tight market and decline in inventory is raising come concern as to what the rest of the year has in store for the Denver market.
And as the Feds are again set to raise interest rates by an expected quarter-point Wednesday in an ongoing, aggressive attempt to fight inflation, there is uncertainty how that move will play out in Denver’s overall real estate picture.
Adding to the market pressures in Denver are skyrocketing property taxes. Nine Denver metro area county assessors sounded the alarm about unprecedented increases in property values and now homeowners are opening their bills to a shock.
“Unfortunately, affordability took a hit with the rollout of tax assessments the last week of April, reflecting sizable increases to property tax bills across the state,” Katz said.
“Higher tax bills, coupled with increased interest rates are going to have a significant impact on buyers’ ability to purchas throughout the state, specifically the Denver metro area.”She noted the average residential property tax increase in the state was 33 percent with some areas seeing an increase as high as 60 percent.
Alarmed homeowners have been pushing for lawmakers to act and Governor Polis introduced a proposal on Monday he hopes will lower the burden for property owners over the next ten years. The proposal, while offering immediate property tax savings, would need to be approved by voters in November.
Repeal of the Gallagher Amendment partly to blame for soaring property taxes
'Marry the house, but date the rate'
The unprecedented forces impacting the Denver real estate picture could deter some potential buyers from jumping into the market race, but experts, like Nick Bailey, President and CEO of Re/Max told Denver7, there are still options for buyers beyond the traditional 30-year mortgage.
“Buyers should be looking at adjustable rate mortgages that could be lower. Buy down opportunities - first-time home buyers – there are programs out there with lower rates,’ said Bailey.
“Right now buyers need to have the mentality that you marry the house but you date the rate.”
While not what many potential buyers probably want to hear, real estate experts in Denver continue to preach patience.
"Which is really difficult, especially at this time of year when we're expecting to see a flood of houses," said Katz.
"There's pent up excitement from the winter, tulips are coming up and it's a fun time to start shopping for homes, that grass is greener. Unfortunately, there's not a lot to look at."