Slowing Sales Give Denver Home Buyers More Wiggle Room
The Denver housing market has been a hot topic for years, with home prices skyrocketing and inventory flying off the shelves. But a recent report from the Denver Metro Association of Realtors (DMAR) shows that the market may finally be starting to slow down. And while this may spell good news for buyers, sellers may need to adjust their expectations.
According to the November Market Trends report, the number of new listings in the Denver metro area dropped by 17% last month.
This is in line with previous Novembers, but it also marks a 0.65% decrease from the same time last year. And with a total of 7,482 active listings at the end of October, the market saw a slight 2.6% increase from 2022 but a 1.9% decrease from September.
But perhaps the most telling sign of a slowing market is the decrease in sales. The report shows that the number of homes sold dropped by 11.6% in October from the previous month, and by 15.7% from the same time last year. Sales volume also took a hit, falling by 11.7% to $2.05 billion last month.
The median close price for residential properties in October was $585,000, which remained unchanged from September but saw a 2.6% increase from last year. While this may seem like good news for sellers, the report also highlights a decrease in the median sale price for single-family homes, which dropped by 1.4% month-over-month and only saw a 3.8% increase from last year.
The condo market, on the other hand, saw a 1.2% increase in median sale price last month, but this only amounted to a 5% increase from the previous year, bringing the median condo sale price to $425,000.
And it's not just the numbers that are reflecting a slowing market.
Libby Levinson-Katz, chair of the DMAR Market Trends Committee, points out that buyers are no longer willing to overpay for homes, with close-to-list-price ratios now at 99% compared to a high of 103% during the pandemic. This means that sellers may need to adjust their expectations and let go of those pandemic-era sale prices.
Furthermore, the average days on the market for both single-family homes and condos increased by more than 14% to 16 days, signaling that buyers are taking their time and carefully considering their options. This is a stark contrast from the frenzied market of the past few years, where homes were snatched up within days, sometimes even hours, of being listed.
According to Andrew Abrams, a DMAR Market Trends Committee member, buyers may now even have the upper hand in negotiations, with concessions becoming increasingly common. This means that buyers can use these concessions to decrease their interest rate, closing costs, or pre-paid expenses – a win for those looking to purchase a home in Denver.
So, what does this all mean for the Denver housing market?
While it may seem like a slowdown, it's important to put things into perspective. Levinson-Katz points out that the market is performing similarly to pre-pandemic levels in 2019. And with inventory growing and buyers having more choices, it's crucial for sellers to price their homes competitively and make sure their properties are in top condition to stand out in a now more competitive market.
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In the end, the Denver housing market may finally be showing signs of cooling down, but it's important for all parties involved to proceed with caution and adapt to the changing market conditions.
Buyers, according to the experts, should take advantage of the increased inventory and potential cost-saving concessions, while sellers should carefully consider their pricing and prepare their homes for sale.
Only time will tell how the market will continue to evolve, but one thing is for sure: Denver's housing market continues to be a topic of discussion.