At first glance, the July numbers suggest a cooling market, but in a broader context, buyer competition doesn’t look to be letting up quite yet. Inventory ticked up this month, but it was still the lowest inventory for July on record. Prices ticked down slightly from June but, the year-over-year increase was 16.40%. While the landscape remains challenging for some buyers, many signs indicate that now might be the time to test the waters for those who were previously hesitant.
Seller pricing matters. The average close price in July was 104% higher than the listed price. This suggests that buyers are anticipating paying more than the listed price for a home. If a seller prices a home too high, it might discourage buyers who think it will close out of their price range from even seeing the home. Choosing the right price for a home can maximize the buyer pool and foster healthy competition. We are seeing sellers shoot for the stars with price and spending more time on the market because of it.
A home’s price is determined by two factors, sold comparables and competition. Competition for desirable homes, whether in location, layout, or finish level remains high. We can see this most clearly in the median days on market, only 4 days, the same number as June. This means that the majority of homes that come on Thursday are under contract by Monday.
As the US slowly recovers from the shutdowns in 2020, the threat of the Delta variant has caused further delays, across the entire economy, but especially construction. Construction costs remain high both in labor and supplies. While lumber futures have stabilized, experts expect that it will take another 6-9 months for it to be reflected at the hardware store. The other thing that isn’t seeing much movement? Interest rates. Interest rates do remain extraordinarily low and the Fed has given no indication that will change significantly anytime soon.
The Denver residential market continues to see record demand and growth. One thing remains constant, we have never been more confident in the value that we, as advisors offer to both buyer and seller clients. A full-service and dedicated advisor makes all the difference throughout the transaction.