Metro Denver the second most competitive housing market in country after Bay Area
Denver’s housing market was the second most competitive out of the nation’s 50 largest metro areas, with seven in 10 homes selling for above the list price in April, according to a new report from OJO Labs.
The San Francisco Bay Area led the nation with 82% of listings selling for above the initial asking price in April. Right behind San Francisco was Denver, which has shot up the ranking in recent months and is now at 70%, up from 66% in March, which ranked fifth, and 59% a year earlier.
On average, Denver-area homes sold for $33,464 above the list price in April, up from $27,045 in March and $11,916 at this time last year, according to the Austin-based real estate technology company. Nationally, just over half of all homes, 52% sold for above the list price with the average premium paid at $13,655 in the 50 top metros. That is three times the premium sellers received a year earlier.
“The pace and cost of competition continue to rise,” said the report’s author Patrick Kearns.
Listing agents usually do their best to get the starting price right and the rising share of homes selling at a premium reflects how heated the market remains. Buyers are still willing to engage in bidding wars even with interest rates around 5.5% on a 30-year mortgage, which has sharply reduced affordability.
Seattle brokerage Redfin estimates that the monthly mortgage payment on a median-priced house in the U.S. has shot up from around $1,700 a month at the start of the year to more than $2,400 in April. More sellers are taking a discount, Redfin said, but the overall premium paid is also rising.
“Unfortunately for buyers hoping to find a deal as competition cools, sellers are pulling back even faster (than buyers), which is keeping the market deep in seller’s territory. So even though price drops are becoming more common, most homes are still selling above asking price and in record time,” said Redfin Chief Economist Daryl Fairweather, in her report.
The Colorado Association of Realtors doesn’t track what share of homes are going for above list price, but it does track the premium paid above list price for all homes sold in a given month. That premium above list for a single-family home in Denver County reached a record 108.5% in April, said Matthew Leprino, CEO of Remingo and a Denver-area Realtor.
“I wouldn’t speculate that every house went above asking but 70% seems completely in the realm of possibility given these numbers,” Leprino said.
In January, the Denver premium above list price was 102.6%, in February it was 106.3%, and in March it was 107.8%. The last time Denver sellers in the aggregate had to take a discount was in May and June of 2020, when the market was opening up again from pandemic-related restrictions on showings. Even then the haircut was small, 99.1% and 99.7%, Leprino said.
Looking at the seven-county metro area, the premium above list was 106.5% in April, up from 105.8% in March and 104.4% in February. The metro market hasn’t seen a seller’s discount since July 2020, when sellers received on average 99.9% of the list price, he said.