#425: October 2022 Market Updates: Take Advantage of Dropping Rates and Seller Concessions

The October 2022 market stats for Denver, Colorado Springs, and Pueblo are now out and we’re analyzing what they mean. Low inventory continues to be a concern, but homes are staying on the market longer. This means buyers can be pickier, take some time to think about the property, and even ask for seller concessions.

We’re also tracking a potential drop in mortgage rates, local and national rental trends, and the latest developments on Denver ADUs.

To hear the full discussion with Envision Advisors agents Jenny Bayless and Preston Newberry, Stacy Rozansky and me, listen to the podcast or watch the YouTube video.

Three Learning Options!

1. Listen to the podcast “#425: October 2022 Market Updates: Take Advantage of Dropping Rates and Seller Concessions” Denver Real Estate Investing Podcast
2. Watch the YouTube video.
3. Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.

Denver Market Stats and Observations Active Listings

• +115% from last year
• -5% from last month
  • Homes saw bigger gains vs. last year than condos
  • I suspect buyers are trading down to manage affordability, so condos might see extra demand for a while
• Average listing count for October (1985-2021): 15,000
  • Last year: 3,375
  • Current: 7,300
  • Last “normal” market (2019): 8,600

Under Contract

• 39% from last year
• -4% from last month (about normal seasonality)

Discounts

• -1.3% current (discount) vs. +1.7% (premium) a year ago
• Discounts grew by 0.1% this month vs last month

Closed Units

• -40% from last year
• -25% from last month
  • The month-on-month change is partially normal seasonality trends
  • The year-on-year change is probably 5-8% a normalization (2021 was our highest sales count ever), and the rest is due to the interest rate spike
  • I suspect at -40% reduction, we’re at the worst of the correction
  • We’ll probably see the next 2-3 months in the -30% -35% year over year change
  • Hopefully by mid-1Q 2023 we’ll see declines shrink to the -20% to -25% year over year change

Closed Price

• +8% from last year
  • About the same as inflation
• -1% from last month
  • The media will make a big deal out of this, but it’s not truly alarming
• Condos and homes were similar
• I’m expecting Denver in 2023 will be somewhere in the range of -3% to +3% for the average price vs. all of 2022
• There are still a few bidding wars, but a LOT less than in 1Q this year

Days in MLS

• +100% from last year (28 DOM now, vs 14 in 2021)
• +4% from last month

Colorado Springs Market Stats and Observations New Listings

• Homes
  • Down 17% from last month
  • Down 22% from last year
• Condos
  • Down 20% from last month
  • Down 34% from last year
• Generally similar to Denver

Inventory

• Homes
  • Down 2% from last month
  • Up 150% from last year
• Condos
  • Up 12% from last month
  • Up 105% from last year
• About the same as Denver

As with Denver, we expect that the balance of 4Q will be slow, but that we are probably seeing the worst of it right now.

Closed Units

Homes

• Down 15% from last month
• Down 33% from last year

Condos

• Down 20% from last month
• Down 34% from last year

Colorado Springs is doing better than Denver, and most of the western US states. CO Springs was more resilient in the last downturn, and we might be on the same path here, too.

Closed Price

• Homes
  • Up 2% from last month
  • Up 4% from last year
• Condos
  • Up 1% from last month
  • Up 12% from last year

Generally stronger performance than Denver.

Note: The above Executive Summary is from Lon Welsh of Your Castle Real Estate.

Denver Housing Trends

Colorado Springs Housing Trends

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