Denver home sellers are having a harder time unloading their properties than they have been in recent years.
That means more homes are available for buyers. So does that make this a buyer’s market?
“I believe we are moving toward a balanced market, which we haven’t seen in over 16 years,” DMAR Market Trends Committee Chair Libby Levinson-Katz wrote in the latest report. “A traditional cycle for the Denver real estate market is seven years. Due to an economic crash and a global pandemic, the cycles were extended, but a correction was needed.”
Some people have delayed their home-buying dreams, as mortgage rates have risen upwards of 7% in September. Sellers are no longer able to over-price their homes or enjoy bidding wars.
“The market is entering a period of neutrality where the bullish ways of extreme markets make way for a stage of compromise, with buyers and sellers working together for a win-win experience,” wrote Levinson-Katz.
In the eleven-county metro area, there is more supply, though home prices have remained higher than they were at this time last year.
DMAR’s data looks at Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties.
At the end of September, there were 7,683 homes — both houses and attached properties — on the market. That’s almost 94% more than there were this time last year.
The median price of a house is $632,000 — about 2% less than it was in August but still nearly 10% more than it was in September 2021.
Median price for an attached property, like an apartment or a row house, is $410,000 — up 2.68% from August and 7.89% from September 2021.
All this means that sellers have to try harder to sell their homes: staging the properties, hiring professional photographers, and actively seeking buyers, according to DMAR.
Investors are continuing to fix and flip homes in the metro area.
Lumber prices have dropped to pre-COVID levels, according to the report, which makes investing in a fix-and-flip a more lucrative prospect.
A lot of that has been happening in Southwest Denver, as we reported last month.
“Barnum, Westwood, Mar Lee and Harvey Park were some of the hottest neighborhoods for property flips in 2021 and the first part of 2022,” according to the report.
Homes priced in different ranges are experiencing a variety of conditions.
The luxury market, homes over $1 million, saw a massive hike in listings, with 5,962, or almost 67% more available than there were in the previous month.
Inventory of signature market properties ranging between $750,000 and $999,999, saw a nearly 3% increase month over month, though the number of sales fell.
“Consumer demand for homeownership remains high but price appreciation and interest rates have added affordability pressure on buyers,” explained realtor and DMAR Market Trends Committee member Amanda Snitker, referring to the signature market. “Interest rates control the pendulum as it swings back and forth between favoring sellers and buyers.”
The market for homes between $500,000 and $749,999 still has low inventory levels, but the number of sales is down and homes are sitting on the market longer.
In this price range, “those who are moving now are likely the ones who need to move for work or other immediate reasons,” explained realtor Nick DiPasquale.
And the classic market of homes priced between $300,000 and $499,999 saw fewer sales than in August. But prices are continuing to rise in this range — over 10% since September 2021.
Realtor Susan Thayer noted, “Finding a home priced under $500,000 will remain a challenge as rising interest rates affect affordability and the traditionally slower winter months draw near.”