“While Halloween may be behind us, the unprecedented year of increasing interest rates has made this year feel a bit spooky”, said the Denver Metro Association of Realtors Market Stats Committee.
However, as we enter into the holiday season, the market experts remain grateful for the unique opportunities available for both buyers and sellers in this market.
Despite a shifting market and general uncertainty, people are still buying and selling homes. In the Denver Metro area, it is rare to see inventory rise toward the end of the year, as we tend to see the lowest inventory numbers within the last two months of the year. Of particular note, we've surpassed the inventory numbers year-over-year. New listings dropped 16.84 percent to 3,816 month-over-month; however, this drop is normal due to seasonality and, more im-portantly, is down 0.65 percent year-over-year. Active listings at month-end finished at 7,482, up slightly by 2.63 percent from this time last year. Pending sales are up slightly from this time last year, up 1.76 percent.
A helpful guiding principle is to look at historical data as opposed to getting hysterical. If you look at the year-to-date numbers on page 13, this year performed most closely to pre-pandemic levels of 2019. Sales volume is over $24 million, median days in the MLS is at 11 for 2023-which is just one day shy of the median in 2019-and the close-price-to-list-price ratios are both over 99 percent, while pandemic years were over 103 percent.
Ultimately, sellers need to get the pandemic years out of their minds. That time frame was a perfect storm of low interest rates, unprecedented demand while residents fell out of love with their homes working from home and the ability to literally work anywhere was a novel idea. As employees are called back to the office and interest rates hover around eight percent, the party is over. Sellers need to focus on value and put themselves in the buyer's shoes. Buyers are no longer willing to overpay and, as such, pricing is the number one key in this market to sell a home.
Buyers on the other hand are sitting in a unique position, and some know it. While overall mortgage applications are low, hard money loans are on the rise as well as gifted funds from loved ones to help bridge the gap towards home owner-ship. This may be surprising, but December is historically a busy time of year, and increasing inventory is finally providing buyers with the gift of choice. Many buyers tend to hibernate for the winter. But for those who continue to look through the holiday season, there is less competition and sellers are usually more motivated to sell before the end of the year.
For buyers who feel priced out of the housing market, an alternative tactic is to look at other markets that are within their budget. Non-owner-occupant rental properties are a great option to find a way into the housing market. Regardless of the path, buyers are gaining more control in this market as time goes on.
At the end of the day, properties will continue to trade hands for the right price and terms. Interest rates can be daunt-ing; however, the key is to get onto the escalator of homeownership and experience appreciation as it moves upwards over time.
Learn more about the market from the Denver Metro Association of Realtors.
