August 2023 Market Report
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The Denver Metro Area historically leads National trends, according to DMAR's Market Trends Committee.
We exited the Great Recession ahead of the rest of the country and experienced a surge in real estate sales during the early days of COVID-19 while the rest of the country tried to find its bearings. While we work to navigate this new landscape, it's important to note that Denver remains one of the Nation's strongest housing markets.
So, what does that mean locally? Simply put, inventory is slowly growing, inching us closer to a balanced market that gives buyers and sellers equal footing. New listings increased 1.74 percent, and pending sales increased by 0.76 percent month over month. More notably, active listings at month's end increased 8.87 percent month over month to 6,858, while pending sales declined 13 91 percent and closed volume declined 16.11 percent. Activity is slowing slightly with inventory increases. The median close price dropped 1.36 percent from $590,000 to $582,000 and median days on market increased 22.22 percent to 11 days.
Buyers feel the shift and think that we are no longer in a full-price market. Median days on market increasing to 11 days may seem benign, but it also means homes are sitting on the market for 70 days or more. As a result, buyers want to negotiate on price and receive a concession for a rate buydown. Close-price-to-list-price ratio remains in the 99th percentile, showcasing buyers and sellers are coming together to make sales happen without huge negotiation swings. Pricing in this market is a science. If a home is priced correctly, or even priced under market, it may still receive multiple offers. However, if the price is slightly high then das on market climb until you find the right buver, or the right price.
Even if there were a rapid decline in interest rates, I believe we are slowly inching towards a balanced market. The months of inventory for detached homes under $1 million are sitting at a month and a half to just shy of two months, while above a million dollars, the months of inventory sits at roughly two and a half months and increases to 5.79 months of inventory with $2 million plus. The best performing price band for both detached and attached homes was $750.000 - $999,999 with an increase in sales month to month of over three percent.
For serious buyers who have their financing buttoned up, there are a number of opportunities available. I recently spoke with an agent listing a townhome who was frustrated that she's been told by five separate buyer's agents that an offer is coming only to have the buyers hold off due to rate increases. The important message is that sellers are eager for qualified buyers to make an offer. It's critical to make sure buyers understand their buying power before they start looking at properties.
As the Denver market continues to adiust, there are was to make this market work for you. FHA loan applications are on the rise, there are first-time homebuyer down payment assistance programs and assumable loans are quickly becoming an advantageous marketing incentive. The key to success in real estate has always been to buy what you can afford and then hold it for as long as you can.
We don't know how long these current market conditions will hold, but at the end of the day, it's always a good time to buy. In my opinion, having the ability to negotiate on price and terms is a better place to sit than paying 10 percent or more on a home in a competitive scenario while waiving a litany of due diligence dates.
