DMAR Real Estate Market Trends Report | OCT. '23
While the market was unpredictable this spring, the Denver Metro is seeing the traditional seasonal slowdown in residential sales as fall takes over.
New listings dropped 5.92 percent to 4,589 homes, while active listings at month’s end rose 11.24 percent to 7.629 listings. Pending sales also fell 9.29 percent, closed sales declined 20.88 percent and, as such, sales volume declined 20.88 percent. Months of inventory jumped 47.24 percent to 2.4 while median days in MLS jumped 27.27 percent to 14 up from 11 days last month, which is a 12.5 percent decline year-over-year. While inventory is growing, the median price point also grew 0.69 percent up last month to $585,000 which is also an increase year-over-year of 0.86 percent. Additionally, the close-price-to-list-price ratio was up 0.31 percent year-over-year to 99.19 percent.
“While overall the data reflects marginal changes, this small indicator showcases that prices are still strong in the Denver Metro area,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “Buyers are not generally haggling on price; however, they are asking for concessions. As most Realtors® know, concession requests from buyers have been on the rise since the beginning of the year as they have made it easier for buyers to navigate this market. Buyers and sellers continue to find common ground in this market and people are moving every day for a myriad of reasons.”
Over the past seven months, inventory has been steadily increasing, which means more options for buyers. Yet, the data reflects that demand is softening. More supply and less demand should lead to price declines. However, in the current Denver Metro market, home prices continue to gently climb. This dichotomy creates an opening for first-time buyers.
Levinson-Katz added, “First-time homebuyers are leading the charge with new loan applications. They aren’t tied to historically low interest rates and feel the freedom to move as the current interest rates are all they know. Additionally, they understand that purchasing a home is a faster way to build wealth and gain equity as opposed to paying their landlord’s mortgage. They are keenly aware that properties are sitting on the market longer, and sellers are often making multiple price reductions, providing first-time homebuyers with the leverage to ask for concessions. In many ways, this is the perfect market for first-time homebuyers to seize opportunities. While interest rates are high, these buyers can negotiate instead of jumping into bidding wars where they might pay 10 percent over the asking price to secure a property like we did a year ago.”
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 September, the $1 million and above market segment defied optimistic predictions and slowed down even more from an already sleepy summer.
Month-over-month, closings were down 17.65 percent for detached homes in the $1 million to $1.49 million range, 13.58 percent in the $1.5 million to $1.99 million range and 6.67 percent in the over $2 million range. The slowdown in closings was more dramatic in the attached segment, where closings between $1 million to $1.49 million slowed by 27.04 percent from August. Additionally, new listings, pending sales and total sales volume were all down month-over-month at 4.43 percent, 15.20 percent and 15.14 percent, respectively. Sales volume is also down notably from last year, by 20.54 percent year-to-date.
This decrease in activity across the board has caused the highest inventory levels that the Denver Metro has seen in a year. Homes in the $1.5 million to $1.99 million range now have almost five months of inventory, 4.73 months for detached and 4.75 for attached, while homes priced over $2 million have over six months of inventory at 6.09 months for detached and seven for attached. Thus, this portion of the market has finally tipped into a balanced, if not a buyer’s, market for the first time in recent history.
“This represents good news for buyers looking at higher price points,” said Colleen Covell, DMAR Market Trends Committee member and Metro Denver Realtor®. “The average days in MLS is up a whopping 78.95 percent year-over-year, with the average home priced over $1 million taking 34 days to sell, giving buyers time and negotiating power. The average close-price-to-list-price ratio is also down year-over-year by almost five percent to 99.03 percent, signaling that buyers can get their dream home under the asking price. Sellers need to appreciate that the market has shifted significantly in this segment and correct pricing is critical to a quick sale.”
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