Homes Are Still Selling, Buyers Are Still Buying, But Market Is Slowed Down by the Chaos in Washington
However, this statement applies primarily to listings under $1 million. The chaos doesn't seem to slow down the market for million and multi-million-dollar listings.
It’s clear to real estate professionals that, although some buyers must buy and some sellers must sell, buyers and sellers who are not under pressure to do so are looking and listening before buying or selling a home. These are complicated times!
The statistics below reflect a slowing of the real estate market within 25 miles of downtown Denver — and likely nationwide.
Although every other metric documents a slowing market, the median closed prices set a record for both January and February:
Meanwhile, look at how many listings expired without selling during the same months:
The number of active listings is surging, but the number sold listings is dropping, as shown in these two charts:
That has resulted in the higher inventory of unsold listings in recent months:
Another important metric is the ratio of closed price to original listing price. During the pandemic, more than half the listings sold for as much as 6.3% above the listing price as a result of bidding wars, but look how that metric has changed:
With the “spring selling season” coming up, I find it hard to be optimistic about the real estate market, because it appears that the chaos we’re seeing in our national government is only going to get worse, and markets don’t like uncertainty.
If builders, who get most of their lumber from Canada, see a big increase in costs due to tariffs, they may pause construction or at least increase the price of new homes.
Meanwhile, if the courts end up allowing the mass firing of federal workers — many of whom work in Lakewood’s Federal Center and elsewhere in Colorado, such as the national parks, VA hospitals and national forests — that could be very disruptive to our real estate market.
Note: These observations apply primarily to listings under $1 million. Many metrics for homes over $1 million are positive, and we’re even seeing bidding wars and quicker sales in that price range. For example, while the number of closings in lower-priced homes faltered in January and February compared to previous years, the number of closings of homes above $1 million was higher than the five previous years for January and February.
