DMAR Real Estate Market Trends Report | NOV. '23
Despite a shifting market and general uncertainty, the report this month showed that people are still buying and selling homes. In the Denver Metro area, it’s rare to see inventory rise toward the end of the year, as we tend to see the lowest inventory numbers within the last two months of the year. Of particular note, we’ve surpassed the inventory numbers year-over-year. This year proved no different, however, there are different opportunities in the market.
New listings dropped 16.84 percent to 3,816 month-over-month, however, this drop is normal due to seasonality and, more importantly, is down 0.65 percent year-over-year. Active listings at month-end finished at 7,482, up slightly by 2.63 percent from this time last year. Pending sales are up slightly from this time last year, up 1.76 percent. Of particular note, the Denver Metro has surpassed the inventory numbers year-over-year.
“A helpful guiding principle is to look at historical data because if you look at the year-to-date numbers, this year performed most closely to pre-pandemic levels of 2019 and sales volume is over $ 24 million, and median days in the MLS is at 11 for 2023, which is just one day shy of the median in 2019,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “The close-price-to-list-price ratios are both over 99 percent, while pandemic years were over 103 percent. Ultimately, sellers need to get the pandemic years out of their minds. Sellers need to focus on value and put themselves in the buyer’s shoes. Buyers are no longer willing to overpay and, as such, pricing is the number one key in this market to sell a home. At the end of the day, properties will continue to trade hands for the right price and terms. Interest rates can be daunting; however, the key is to get onto the escalator of homeownership and experience appreciation as it moves upwards over time.”
In this current market, buyers are now sitting in a unique position. While overall mortgage applications are low, hard money loans are on the rise as well as gifted funds to help bridge the gap towards homeownership. December is historically a busy time of year in the Denver Metro, and increasing inventory is finally providing buyers with the gift of choice. Many buyers tend to hibernate for the winter, but for those who continue to look through the holiday season, there is less competition and sellers are usually more motivated to sell before the end of the year.
DMAR’s monthly report also includes statistics and analyses in its supplemental markets that include properties sold for $1 million or greater, properties sold between $750,000 and $999,999 and properties sold between $500,000 and $749,999.
This October, the $1 million and above market segment saw that the peak of inventory is over as the market transitions to winter. The number of new listings is down 15.96 percent compared to the previous month, which is consistent with the rest of the market, with seasonal norms and with what we have been seeing from the “golden handcuffs.” Incentives to both move and buy are down, as is the incentive to buy at 14.91 percent. The balance of supply and demand is keeping prices relatively balanced. The average price of a sale in the $1 million price point is $1,660,783.68.
The decrease in new listings and closed sales have not stopped high price point properties from selling. The highest selling detached home in the Denver Metro sold for $14,705,000 in Golden and the highest selling attached property in the Denver Metro sold for $3,000,000 in Greenwood Village.
If a property is priced right and turn-key, it can still sell quickly and above asking price. With that in mind, however, the days in MLS have increased to 40 on average for detached properties and 44 for attached properties. The close-price-to-list price ratios are down to 97.90 percent, reflecting that sellers are receiving below asking price on their listings. The $1 to $1.5 million detached market is still considered a seller’s market with 3.12 months of inventory, the detached market above $2 million is a buyer’s market, the $1 to $1.5 million attached market is considered a neutral market at 4.56 months of inventory and the above $1.5 million attached market is a buyer’s market.
“Concessions, no matter what market one is in, seem to be the name of the game,” said Andrew Abrams, DMAR Market Trends Committee member and Metro Denver Realtor®. “Buyers can use concessions to decrease their interest rate or put toward closing costs or pre-paids. Creativity and working with a professional Realtor® continue to be important aspects of navigating the real estate market. As supply and demand decrease going into the end of the year, creativity in how you structure a deal can be the difference in how you spend your holiday season.”
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