Can We Thaw Out Already?

by Matt Thomas

Freeze or Thaw?

December 2024 wrapped up with promising signs of increased activity, and January 2025 has shown notable growth in new listings, hinting at a potentially busy spring ahead.

However, January brought true Colorado winter weather, with frigid temperatures and lingering snow from seasonal storms, making it feel like the longest month of the year. And, while social media was flooded with memes about January’s endless chill, the real estate market also experienced its own cool-down, influenced by seasonal slowdowns, persistent high mortgage rates, and market uncertainty.

Local Buzz

New Listings: December saw an increase in seller activity, with 1,889 new listings—9% higher than December 2023. However, as expected, holiday slowdowns led to a 31% drop in new listings compared to November.

Home Prices: The median closed price in December was $580,000, reflecting a 6% increase year-over-year. Prices did see a slight 3% dip from October, likely due to seasonal trends and seller adjustments.

Time on Market: Homes lingered on the market longer, with a median of 41 days on market—11 days more than in December 2023.

Buyer Activity: Despite the holiday season, buyers remained active, executing contracts on 9% more (2,459 properties) than last December. However, this was still 16% lower than November’s activity!

Market Opportunities: With homes spending more time on the market and price reductions becoming more common, buyers may have increased negotiating power heading into 2025.

Interest Rates: Mortgage rates remain elevated, but there are signs that some sellers are beginning to adjust expectations, helping to balance affordability concerns.

National Market Overview

Homesellers

The "lock-in effect," where homeowners hesitate to sell due to low existing mortgage rates, is starting to ease. New listings increased by 10.8% year-over-year, marking the busiest January for listings since 2021.

Realtor.com projects that home sales will rise by 1.5% in 2025, thanks to slowly decreasing mortgage rates and natural market turnover.

The biggest inventory gains were seen in the Western (31%) and Southern (27.2%) regions, with Denver leading major metros with a 54.8% increase in active listings.

Homebuyers

The average home spent 73 days on the market, making this January the slowest since 2020. This indicates buyers are taking their time and evaluating options carefully.

Price Reductions: 15.6% of sellers reduced their asking prices in January, showing a slight increase compared to last year.

While the national median list price dropped 2.2% from last year to $400,500, price-per-square-foot values rose by 1.2%, signaling that home values remain stable.

Looking Ahead: What to Expect in February and Beyond

Industry professionals anticipate increased market activity as we move deeper into the first quarter of 2025. Locally, Denver Metro is experiencing early signs of seller readiness, with an uptick in "Coming Soon" listings. Nationally, the slow thaw of the "lock-in effect" is at least a thawing and it may suggest that more inventory may be on the horizon.

BOTTOM LINE

While mortgage rates remain a key factor in shaping demand, the market is showing resilience, with steady home values and growing inventory providing opportunities for both buyers and sellers.

Thinking about making a move this year? You may want to check out realtor.com's 2025 Housing Forecast. But fear not, we're going to keep you informed! Whether you're considering selling your home or looking for your next one, now is a great time to start planning. Let’s discuss your goals and how you can position yourself strategically in this evolving market.

Stay tuned for next month’s ELEVATE: Market Watch for more insights and updates!

GET MORE INFORMATION

Matt Thomas

Consultant | Broker Associate | FAFA100030130

info@altituderealestategroup.com

+1(303) 269-1617