As published in DMAR Market Trends, December 2023

Homes in great condition and priced well continue to attract offers within a week or two of listing. Conversely, homes in need of “work” linger on the market, awaiting buyers who often hold out for two or three price reductions before making an offer.

Retail sales in Metro Denver are not keeping up with inflation, with August sales only 0.3% higher than in 2022. Year-to-date growth stands at 1.4%, contrasting with a 5.4% increase in regional prices in September.

In 2022, 21.2% of Colorado’s workforce worked remotely, six percentage points higher than the national average. The figure declined by 2.5 percentage points as some returned to in-person work.

Denver ranked as the fifth most popular city for Millennials relocating in 2022, constituting 40.78% of the city’s total population.

Denver County has seen a record number of eviction filings, prompting a $30 million assistance package in November to mitigate evictions statewide.

Wall Street investors increasingly believe that there is a higher likelihood of the central bank cutting interest rates by May 2024.

HUD announced new resources and regulatory flexibilities to address homelessness, allocating $50 million in Youth Homelessness System Improvement grant funding nationwide.

While the potential for rental income has increased across generations, a recent Zillow survey showed that 55% of Millennial homebuyers and 51% of Gen Z buyers prioritize rentability in a new home purchase, compared to 39% of all homebuyers. Latinx individuals are particularly inclined to rent out a portion of their homes.

First-time homebuyers, despite facing high prices and interest rates, remain a dominant force in the market with the percentage of homebuyers aged 25 to 34 with a co-borrower aged 55+ increasing from 0.6% in 2000 to 2.5% Q1 2023.

Design professionals predict that next year’s hottest bathroom designs will include backlit mirrors, smart toilets, doorless showers and mini-fridges for cooling beverages medications creams and makeup.

Seven states, including Colorado, have chosen black as the top front door color making it the top-trending front door color in the U.S.

The wealth gap between homeowners and renters is widening, with the median net worth growth from 2019 to 2022 being the largest three-year increase over the history of the modern Survey of Consumer Finance. Homeowner households now have a net worth 40 times higher than that of renter households.

MORTGAGE NEWS

Mortgage purchase applications demonstrated that even small rate movements can significantly impact buyer activity. In November, mortgage purchase applications increased by 16% as rates dropped 0.56% to 7.13%.

The current Fed Rate stands at 5.25 to 5.5% Predictions from financial institutions vary, with UBS forecasting a Fed Rate of 1.75% in 2024, Morgan Stanley at 2.38% and Goldman Sachs at 4%. All forecasts anticipate a recession, higher unemployment and a weakening consumer.

New loan limits for 2024 were released, with National Conforming at $766,550 and Denver Metro at $816,500.

On November 18, Fannie Mae released their 5% down owner-occupied multi-unit purchase loan program, complemented by 2024 loan limits of $1,045,250 for two units, $1,263,500 for three unites and $1,570,200 for four units.