The Denver housing market continued its slowdown in September, falling short, however, of becoming a buyer’s market.
“There have been changes, but we have not shifted to a buyer’s market,” noted Jill Schafer, Chair of the Denver Metro Association of Realtors (DMAR) Market Trends Committee, in the DMAR’s monthly report. “Let me repeat that. We haven’t not shifted to a buyer’s market.”
Schafer added that sellers “still hold the upper hand” in the metro area overall for several reasons: Inventory is still tight. And while appreciation has slowed, it is not significantly dropping.
Nonetheless, buyers are making inroads as sellers face tougher conditions and soften their stances. The DMAR monthly report noted that:
- Bidding wars have mostly disappeared. Instead, “buyers are happily negotiating with sellers on price, general terms, rent-backs to assist with buyer’s lease obligations and inspection items,” according to DMAR. “Sellers are being forced to quickly come off their price if they want a fast sale.”
- The number of days homes spend on the market is lengthening. The average number of days on the market is now 33, up 10% from August and 17.8% from September of 2018. This has resulted in some sellers dropping their original list price. Notes DMAR, “Sellers are not accustomed to sitting on the market for more than a month or two and are often willing to slash prices to move on to their next stage of life.”
- The number of price reductions are growing: In August, 37% of sold properties experienced price reductions before selling. This is up from 31% from August of 2018.
- Sellers are more likely to give buyers concessions: In August, 41% of sellers allowed concessions, versus 34% in August of 2018 and 29% in 2017. The average concession, notes DMAR, was $3,682.
- Sellers “in some segments of the market” are more likely to accept contingent offers
The report also notes that pricing has become tricky because comparable properties “still reflect spring prices.” Rather than sellers basing their price on the market’s past performance, the DMAR report suggests that listing under market will result in “a quicker sale.”
“[I]t’s smart to advise sellers that the last time they had this much competition in September was in 2013,” said Schafer, directing her comment to real estate brokers. “…But don’t forget to tell buyers that we are not in a buyer’s market. Not yet anyway, but the seasons keep turning.”