DENVER – After over a decade of extreme fluctuations, the Denver metro area appears to be entering a “period of neutrality” as homes stay in the market for longer and inventory levels shift in favor of buyers, the Denver Metro Association of Realtors September housing market report shows.
“I believe we are moving toward a balanced market, which we haven’t seen in over 16 years,” said Libby Levinson-Katz, Chair of the Denver Metro Association of Realtors (DMAR) Market Trends Committee in remarks accompanying the report.
In this 360 In-Depth Report, we'll talk about:
- What the current trends show
- What experts say is happening
- What it means for buyers and sellers
- What rent trends across the metro show
Let's start with the numbers 📊
The month of September continued to see an increase in active listings, with 7,683 single-family homes and condos in the market, a 10.72% increase over the prior month and a 26.8% increase since the start of summer.
The number of homes and condos sold in September, however, dropped by 8.40% with a total of 4,113 properties closed on in September, a 27.60% drop from last year – a sign sellers are struggling to keep up with changing pricing trends.
Single-family homes sold for a median price of about $632,000, a 2.02% decrease from August, but condos saw the inverse last month, selling for a median price of about $410,000 – an increase of 2.68%, according to the DMAR report.
Homes and condos are now staying in the market for nearly 30 days, compared to their lowest point during the year in April, when they sold in less than 10.
“Buyers can now take time to find the right house and negotiate the purchase price, inspection-related repairs and appraisal values,” the report states, arguing that even though interest rates are higher because of inflation, buyers – at least some of them – are getting used to the increased rates and are using all available marketplace tools at their disposal to close in on a home.
What does this mean for buyers and sellers? 🤔
Levinson-Katz argues the shift to a balanced market will be an opportunity for both buyers and sellers to “start sharing that balance of power” and have more of a win-win in terms of real estate negotiations.
“My advice for buyers is to take a breath,” said Levinson-Katz. “The last few years, buyers have had to make a decision so, so quickly and they've had to waive all of their rights. Now, buyers are able to negotiate on price, appraised value and inspection items. They can even start asking for credits back from a seller to help buy down their points for their interest rate. They can finally take a moment to look at home homes. Discuss it, talk about it, decide: ‘Yes, this is the home that I see living in for the next X number of years.’"
For sellers, she recommends pricing their homes conservatively.
“We cannot look at data points of sold homes at the beginning of the year or even May. June is still even a little iffy, and so it's very important for a seller to look at the comparable of homes that are selling in their area and price it conservatively,” Levinson-Katz said. “If a home is overpriced, a seller is looking at doing a series of price reductions before it sells, and because of that, that is the main influence that we're seeing that is increasing our days on market, because sellers are pricing their homes based on data from the beginning of the year when that market was considerably more frenzy.”
What about renters? 🏢
Rents across the Denver metro declined slightly over the past month but are up “significantly” when compared to this time last year, according to Apartment List’s monthly update.
Median rents in Denver are currently at $1,441 for a one-bedroom apartment and $1,782 for a two-bedroom. Compared to the state overall, Denver’s year-over-year rent growth (4%) remains lower than the state average of 5.1% as well as the national average of 7.5%.
Trends across the Denver metro region show increases across the board, with Parker still coming in as the most expensive city to rent in, with a two-bedroom media price renting for $2,183, even though the city has seen rents fall by 2.6% over the previous month – the biggest drop across the metro region, Apartment List staff say.
Westminster has seen the fastest rent growth in the metro, with a year-over-year increase of 7.1%. The median two-bedroom there goes for $2,119, while a one-bedroom apartment is renting for $1,778.
Out of all the ten metro cities, Brighton holds the title for the cheapest rent price, with a two-bedroom apartment going for $1,467.
“Compared to most similar cities across the country, Denver is less affordable for renters,” the September report states.
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