After several years of frenzied activity, Denver-metro’s housing market is slowing down, giving buyers more leverage over sellers.
According to the September Denver Metro Association of Realtors (DMAR) report, homes are taking longer to sell, prices are dropping, closings are down, and sellers are offering concessions that were rare just a few months ago.
“Sellers have to recalibrate their expectations after a wild summer,” wrote Andrew Abrams, chair of the DMAR Market Trends Committee, in the report.
Indeed, notes the DMAR report, “Price reductions are on the rise.” For the first time since July of 2020, the close-price-to-list-price ratio dropped below 100%. While the ratio is still 99.41%, it indicates a significant shift in the trend line.
So, too, does the median price for single-family homes, which dropped 2.54% from August, to $579,900. The average price dropped even more: 4.53% from August, to $657,284.
Meanwhile, it took 19 days, on average, for homes to sell, a 46.15% increase from August and a 72.73% increase from August 2021.
Like other experts, Abrams attributes the sudden shift in the market to rising mortgage interest rates—a factor that isn’t likely to go away soon. “As the Fed continues to fight inflation, interest rates will continue to be a conversation topic,” he writes.
For sellers, this means being more flexible and more realistic as buyers’ habits take a sudden turn from waiving inspections and other accommodations to making sure their needs are met.
“Buyers are being more patient. Not just in the amount of time it is taking them to purchase a home but also in making sure they get concessions for inspections,” writes Abrams in the report. “In July, 29.2% of closed properties paid a seller concession, representing a 6.3% increase from 22.9% percent last July. The average concession was $5,015 compared to $3,761 last year.
“Competition to attract buyers is heating up,” he adds, noting that sellers will need to price their homes more carefully and adjust to seasonal trends. Going into fall and the holiday season, the number of properties for sale traditionally drops, as do the number of buyers looking for homes.
On the flip side, Abrams notes that if that is the case, and if interest rates remain below 6%, “we could see a hot start to the New Year.”
For now, though, “hot” is a word that only applies to the temperature outside. “All of the major statistical categories are pointing towards the market slowing down,” notes Abrams.