The Real Estate Review | May 2025
Boots on the Ground
Well, April certainly kept us on our toes, much like a classic Colorado spring day – one moment it feels hot with buyer energy, the next there’s a chill of uncertainty. The big headline? Inventory is definitely on the rise. We saw a significant jump in active listings, up over 22% month-over-month and a whopping 71% compared to last April! New listings also increased, adding more options to the market.
What does this mean when you’re out in the field? Buyers have more choice than they’ve had in a long time. This increased supply, paired with buyers being a bit more cautious due to fluctuating rates and economic whispers, means properties are generally taking longer to go under contract.
Despite the inventory surge, the overall median close price for residential properties nudged up slightly month-over-month and year-over-year.
This isn’t the market crashing; it feels more like a stabilization after the intense appreciation of recent years. However, it’s a nuanced picture – while some truly special or well-priced homes are still seeing multiple offers and selling quickly, others are sitting. This inconsistency means every listing needs to earn buyer attention.
For sellers, this is a competitive environment. Setting realistic expectations is key. Condition, staging, and strategic pricing aren’t just buzzwords anymore – they directly impact whether a home stands out or gathers dust.
For buyers, while there’s caution, there’s also opportunity. More inventory means less frantic bidding wars on many properties. The key is helping clients stay focused on their long-term goals and financial position, rather than getting caught up in daily headlines. With many sellers offering concessions, there are opportunities for smart negotiations, potentially helping with affordability.
In short, the market isn’t a simple “buyer’s” or “seller’s” market right now. It’s a strategic market. Success comes from understanding the hyper-local nuances, educating our clients with realistic data, and tailoring our approach to each unique situation.
Are you or someone you know ready to navigate this strategic market? Let’s connect and discuss how to best position yourself for success in today’s environment.
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Financing Snapshot
Mortgage rates saw some relative volatility in April with the market reacting to economic uncertainty surrounding Trump’s tariff policy. While the initial reaction was fairly pronounced – moving the average 30 year rate from just under 7% to around 6.6% in a single day – it was actually pretty tame compared to the volatility we saw in 2022 and 2023.
Since these waters are relatively uncharted, the market took more of a wait and see approach returning rates to basically the same levels they were prior to “Liberation Day” when the new tariff policy was announced. From here, movement will rely heavily on economic data and reaction from the Fed, which is remaining steadfast in their position of keeping a lean balance sheet with no plans for reducing the fed funds rate.
The magic number for mortgage rates seems to be about 6% or lower based on what we saw in September/October of last year. Whether we see those rates again this year is anybody’s guess but anyone holding out on a purchase or refi will want to react quickly as it’s not likely to stick around if/when it does happen.
Market Insights
We’re starting to see some of the pressure from higher inventory levels seep into the data – something I think will become more pronounced through the rest of this year. With much of the active inventory still lingering on the market, price reductions and days on market won’t be recorded until those homes start to sell and close.
Once that starts to happen, we may see some downward pressure on prices – ending the year either flat or slightly lower than where we started. Most headlines will read with doom and gloom (when do they not?) but there’s opportunity in every market.
The way I see it, this is a rare opportunity for buyers to have an abundance of choice and the ability to walk into negotiations with the upper hand. Those willing and able to find the workarounds now will be much happier long term than those who settle after losing out in 15 bidding wars when the market shifts again.
One thing is certain, this kind of market isn’t going to last forever and all of the factors hindering housing supply are getting more pronounced by the day. State and local government are marching forward with housing policy that does nothing but exacerbate the issue, builders are slowing down production, costs for materials and labor are continuing to rise rapidly, etc…simply put, supply is not being added and when demand eventually recovers – which it will – competition for housing will be fierce and the cost of living will be pushed higher at rapid pace.