After last month's unexpected appreciation, the market has returned to its typical seasonal trend with 1.7% month over month depreciation. Despite this dip, home prices remain up 3% compared to last year. To foster a positive market cycle in the New Year, it's crucial for inventory to decline before January. Luckily, we are seeing that happen. Active listings are down 14.9% month over month and pending home sales are up 22% year over year. Both of these are promising indicators for early 2025 market activity.
In other news, Denver City Council passed a measure allowing accessory dwelling units (ADUs) in all residential zones. This increases the land area where ADUs can be built from 36 percent to 70 percent of Denver’s total residential land. If you are outgrowing your single family home but want to hold onto your 3% interest rate home, an ADU may be a way to get more space without moving.
The National Association of Realtors came out with interesting demographic numbers showing who is buying in our current interest rate environment. First-time home buyers made up just 24% of the market, a record low and down from 32% last year. Meanwhile, cash buyers accounted for 33% of purchases - one of the highest levels since the Great Recession. Sellers are adjusting to the realities of the market with 50% of homes sold in November having at least one price reduction.
TLDR:
Buyers: Most sellers who decide to list at this time of the year need to sell. We can negotiate heavily before the end of the year.
Sellers: You should wait until the new year to list your home.
