Denver realtors had a rough spring in what's normally a high point for home sales.
The number of homes on the market in June was lower than anybody expected at 6,070.
Still, there've been fewer on the market in recent years and inventory is up more than 16% from May. In part, the sluggishness comes from a drop in new listings, as homeowners hold off on selling.
"The primary factor driving this trend is the disparity between sellers' existing mortgage rates and the prevailing market rates," according to realtor Steve Danyliw, in the Denver Metro Association of Realtors' latest market trends report.
High interest rates on mortgages in 2023, between 6% and 7%, have kept many people out of the market. The industry hoped rates would drop closer to 5%, but they're nearing 7% again, offering homebuyers little hope that the trend will change much by year's end.
All this means fewer sales.
The number of closings has dropped more than 21%, leaving the industry, which underestimated how few sales would take place, uncertain about the months to come.
The current median home price -- including both houses and condos, duplexes and other multi-unit properties -- is $600,000, down more than $11,000 from this time last year. Those prices are expected to drop slightly by the end of 2023.
"Bidding wars were down considerably," noted realtor Libby Levinson-Katz, who chairs the DMAR Market Trends Committee. "One reason bidding wars are down is because buyers are far more discerning. They want to negotiate and feel as though they are getting a win in a landscape with rates hovering around 7% and construction costs soaring."
Because of those high construction costs, homes in disrepair are "languishing on the market," she said. "Buyers want homes that are as close to perfect as possible in direct relationship to price."
