Is The Denver Real Estate Market Shifting Towards Buyers?
That is a trick question. While the market is shifting towards the buyers, it is still very much a sellers market. In fact, the Metro Denver real estate market hasn’t been anywhere near a buyers market for over a decade. To be considered a buyers market, the average days on market should be 4 months or longer. Our current number of days on market is 4 days. Just like most things though, this is relative. Prices are trickling down and inventory moving up which are both good signs for buyers. Read on to see what is happening with the market and if I think better days lie ahead for buyers or for sellers.
NOTE: Statistics are taken from Greater Denver Metro Counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park
Metro Denver Real Estate Statistics Snapshot - All Property Types
|Year Over Year|
|Median Sold Price||$544,240||$550,000||$461,355|
|# of Active Listings||4,650||4,130||9,156|
|# Under Contract||6,369||6,884||6,975|
|# Sold Homes||6,632||7,089||7,666|
|Months Supply of Homes||0.8||0.7||1.8|
|Average Days on Market||4||4||8|
Metro Denver Real EState Prices
Median Closed Price For The Entire Denver metro MLS - All Property Subtypes
The median sold price of homes in the Denver metro area dropped for the first time this year. The drop was minimal, but a positive sign for buyers. This is typically the time of year we begin to see prices drop as schools are starting, fewer buyers are looking, and inventory is increasing. Prices as a whole are up 18% year over year from July 2020.
Median Closed Price - Single Family Homes
The median sold price of single family detached homes (houses) dropped 1.2% in July after reaching a record high of $610,000 In June.
Median Closed Price - Attached (townhomes and Condo)
The median sold price for condos and townhomes in Metro Denver also had a slight decrease in July. Year over year, prices for townhomes and condos are up 13.1%.
With prices dropping in July across all segments of the housing market, the market is showing signs that it might start stabilizing and returning to typical seasonal patterns.
Metro Denver Real Estate Supply
New Listings - Metro Denver, All Subtypes
7,586 homes were listed in July which is nearly 1,000 more than average in July. This is more good news for buyers. However, our inventory is still lower than normal and overall, we have had less homes go on the market than average throughout this year.
Homes For Sale - Metro Denver, All Subtypes
While inventory is rising, it is still about 50% lower than it typically is this time of year. As of July 31, we had 4,782 homes available. I expect this number to go up through October and then a less than average drop during the holiday season (hard to believe we are already looking towards the holiday season).
We are starting to see the market correct as more homes are being listed and buyers are starting to slow down. If the market will continue in this direction is yet to be seen. A couple of scenarios could slow the supply of homes; buyers who gave up in the spring might come back to the market and/or sellers who anticipated multiple offers over asking might realize they missed the circus and decide to wait until next spring.
Metro Denver Home Buyer Demand
Sold Homes - Metro Denver, All Subtypes
In July we saw our first decline in the number of homes sold throughout the metro Denver real estate market. If historical trends continue, we should see a slight gain in August before we start our decent towards the typical January low.
Pending Sales - Metro Denver, All Subtypes
The pending homes sales metric is the best indicator of our current market because it is our most recent metric and tells us how many homes went under contract during the month of July, while closed sales and sold prices in July show the results of homes that went under contract months ago in June and late May.
During the month of July, 6,284 homes went under contract. While this is a decrease from May and June, it is still more homes than went under contract during any month prior to the COVID pandemic. Despite this, the pending sales metric also shows a return to normalcy. I expect the numbers to decline slightly through October then a more pronounced drop in November and December before we start our annual climb again next year.
Demand is slowing compared to May and June, but this is the normal trend. Despite the seasonal slow down, demand is still slightly higher than typical for this time of year.
According to Bankrate.com’s Rate Trade Index, “Most mortgage experts are split over where rates will go in the week ahead (Aug. 12-18). In response to Bankrate’s weekly poll, 42 percent said rates will drop, while 33 percent said they would rise and another 25 percent said they will hold.”
Today’s Most Prevalent National Rates as reported by Bankrate.com.
- 30 YEAR FIXED – 3.053%
- 15 YEAR FIXED – 2.347%
- 5 YEAR ARMS – 2.8%.
Denver real estate Forecast and market review
Pricing – Overall, all segments of homes throughout the metro Denver area dropped just over 1% last month and increased 18% year over year.
Supply – Inventory is still extremely low (53% below average as of July 31). However, at one point this year our inventory was down by 72%. As more homes come on the market and seasonal demand drops, our inventory is beginning to recover.
Demand – Demand is dropping from our record highs, but still seasonally high.
What’s Next For The Denver Real Estate Market? – My Denver Real Estate Market Forecast: – Our end of summer market will remain more active than normal but prices will stay flat with slight increases or decreases through September or October when prices will decline more sharply. When we come out of the holiday season in January, inventory will be back at normal levels and prices will increase at a normal or slightly lower than normal level next year.
My Advice For Potential Sellers – I think you still have a few months to get near record level prices for your home. Homes are still going under contract quickly but we are seeing fewer multiple offers and above asking price offers are no longer in the 10’s of thousands above asking.
My Advice For Buyers – If you have been waiting out the storm, now is a good time to get in. we should see inventory increase and prices stay flat with a slight decrease as we get closer to the holiday season. Buyers still need to be competitive, but terms are more reasonable than they were this spring.
Is a Wave of Foreclosures on the Horizon? – Maybe, but it will not have much of an effect on our market if it does come. Unlike in 2008, most homeowners in the Denver area have equity in their homes today. When the moratorium for foreclosures is lifted, these homeowners can either modify their loans or sell their homes at a profit rather then letting them fall into foreclosure. The homes that do go into foreclosure will likely be bought at auction rather than falling to the banks for REO or bank owned sales.