Seasonality is always a factor in the real estate market. This transition season between summer and fall, had a lot of buyers sitting August out. Many Denverites took advantage of a final summer vacation and almost all school-aged kids prepared for and returned to in-person schooling. With the August numbers in, we can now see the effect on the market. We saw this shift represented in an increase of days on the market. Days on market increased from an average of 9 days in July, to 11 days in August.
As we move out of the hottest season for real estate, it is important for buyers and sellers to adjust expectations. Demand is one of the major contributing factors for price and while we continue to expect high demand for well-priced homes, a smaller buyer pool means less demand. In August, the close to list price ratio came down, but only just barely, from 103.99% percent to 102.56%. We expect to continue to see homes closing over list price, but don’t expect to see as many situations where sellers are choosing from 10 or more offers.
We expect buyers will have to continue to waive contingencies as inventory remains low. Despite the low inventory, 5.76 percent more homes were purchased this year in the Denver Metro area than last year at this time. This equates to about 5 billion dollars more in home sales in 2021. The Denver market remains strong, creative buyers are finding homes they love in the limited inventory and utilizing the low-interest rates to do so.
As we look towards fall, we will continue to keep an eye on inventory and home prices. The end of expanded unemployment benefits is hoped to close the gap between the 8.7 million people looking for work and the 10.1 million open jobs. The cost of rent in Denver is up 14%, year over year. These numbers make a bubble seem improbable, but seasonal slowing, inevitable. As always, if you reach out to your broker we can prepare a specific analysis of your neighborhood and the factors that affect it most.