Spring felt like a failure to launch, which has led to a summer kick-off where the natural rhythm of the Denver real estate market simply feels off.
We thrive on predictability, and this current market feels uncertain. While new listings rose 8.87 percent month-over-month to 5,180, we are still down 23.94 percent from last year when we had 6,810 new listings. For perspective, the new listings graph shows that in the previous 10 years, inventory this time of year tends to be in the mid-7,000s, with the height in May of 2019 of 8,796. Today, we are sitting at 5,180 new listings. Month-over-month closed sales were up 6.71 percent to 4,167, the median sales price rose to $595,000 from $580,000 and days in MLS went to six median days as opposed to four days last year.
Due to the lack of inventory, buyers are experiencing a bit of fatigue as they wait for either the perfect home or to uncover a good deal. When finding the right house, buyers are moving a bit more slowly. Active listings at month-end rose 13.16 percent month-over-month and 43.15 year-over-year to 5,228, showcasing a slower absorption of listings on the market. Buyers aren't rushing to see homes as quickly and aren't submitting offers within hours. Conversely, sellers are more realistic and strategize more with price reductions. If they are fortunate to find themselves in a multiple-offer scenario, they are more willing to address inspection items to move to the closing table.
Real estate continues to be very neighborhood specific, especially for single-family homes. Two similar homes in different are-as of town can perform widely differently, where one will receive multiple offers selling to the highest bidder and the other may linger on the market with multiple price reductions.
The real question is, what is the cost of waiting? If that perfect home comes on the market and a buyer loses it, how much is it going to cost in terms of rate, purchase price and time to wait before finding a similar house with this inventory? If a seller receives a low offer, how much will it cost over time with days in MLS and price reductions?
As an industry, we have been following the rise and fall of interest rates with bated breath for the last year. The fact is, many people are making real estate and mortgage decisions right now if they need to. The dramatic shift this year has been that people are no longer making real estate decisions because they'd like to.
While many lenders still predict that interest rates will go down at the end of the year, we can only hope that we have an extended spring/summer season come fall.
Learn more about the market from the Denver Metro Association of Realtors.
Keep reading for an expert opinion on the $750,000-$999,999 market from West + Main Agent Nick DiPasquale.
Thank you to our partners at the Denver Metro Association of Realtors for compiling this information.
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
