The Denver housing market, long favoring sellers, is nearing a tipping point.
“Every indicator points to the market shifting closer to a buyer’s market,” reported Andrew Abrams, chairman of the Denver Metro Association of Realtors’ (DMAR) Market Trends Committee, in the DMAR’s July market report.
While this doesn’t mean sellers won’t find buyers, they might have to work a little harder to close the sale. “You can’t simply put a sign in the yard and expect it to sell,” noted Abrams.
Indeed, the DMAR report held hopeful news for buyers. The average price of a single-family home dropped 3.24% from June to $781,631 —still high, but reversing long-time upward pressure on prices.
Perhaps more importantly, active listings rose 20.62% over June and a startling 96.32% over July of 2021. Active listings at month’s end for single-family homes stood at 5,650. The record low, according to DMAR, was set last year, with 4,056 listings.
How is this impacting buyers?
According to the report, “Showings are much easier to navigate in this ‘new’ market; there aren’t the tight time slots there used to be on most listings and you can schedule – and most likely reschedule—if needed.” Additionally, “buyers have the opportunity to be more thoughtful about their home search and their choices in writing offers.”
On the other hand, they should not expect deep discounts. Sellers “are starting to offer buyer incentives (such as rate buy downs and HOA fee prepayments” after their homes have been on the market a week or two, notes DMAR, but they aren’t dropping prices substantially. In fact, the close-price to list-price ratio was 100.81% in July, meaning some buyers are still paying over the list price.
Abrams noted that he expects this ratio to change in the coming months, to below 100%. He also indicates that sellers will soon need to take a reality check and lower their expectations of bidding wars and buyer concessions.
“There are plenty of cases where the seller has a nice property, lists it reasonably and gets multiple offers,” he reported. “But, that is no longer the norm.”