Is the Denver-metro housing market finally favoring buyers over sellers?
That’s the “question on everyone’s mind,” writes Libby Levinson-Katz, chair of the DMAR Market Trends Committee, in DMAR’s new report on the September market.
The answer is: not yet. But buyers will be thrilled nonetheless.
Levinson-Katz notes in the report that the market is becoming more balanced between buyers and sellers. “Traditionally, a market with less than three months of inventory is considered a seller’s market,” she explains. “…A market with more than six months of inventory is considered a buyer’s market—meaning that the sweet spot of three to six months of inventory is defined as a balanced market.”
Denver is “moving toward” that “sweet spot” she adds, noting that this is highly unusual: The city hasn’t experienced a balanced market in 16 years.
Indeed, active listings were up 10.72% in September from August, reaching 7,683. This represents a 93.48% rise over September of 2021, giving buyers far more choices than they had a year ago. Meanwhile, closings dropped 8.40% from August, at 4,113, indicating that the market is losing some steam.
Buyers are enjoying the change, feeling relief from a market recently so hot that bidding wars erupted routinely over homes.
“Buyers are joyful as they are finally gaining power regarding their real estate purchased,” writes Levinson-Katz. “They can now take time to find the right house and negotiate the purchase price, inspection-related repairs and appraisal values.”
Conversely, she notes, “For many sellers, it feels as though the rug has been pulled out from underneath them.”
Sellers now find that pricing homes carefully is critical, as price reductions are on the rise. According to DMAR, a recent study of the July 2021 housing markets of 97 cities found that Denver ranked second for the most number of price reductions, just behind Boise, Idaho. Sellers dropped their price 58% of the time that month.
“We’re seeing price reductions in highly desirable areas and areas where we have not observed price reductions over the past two-ish years,” reports DMAR, which underscores the fact that for sellers, times have changed.
“Previously, sellers could get offers without staging or doing little to nothing in order to prep their homes for market,” notes DMAR. “This is no longer the case.”