July Metro Denver Market Review
July has always been a unique month for Denver’s real estate market. Historically, it’s a time when people take a break from buying and selling to enjoy the summer. But this year, the market has shown some surprising trends that are worth diving into. Understanding these shifts can help you make informed decisions whether you’re a buyer or a seller. Let’s take a closer look at what happened in July.
A Slower Pace with Hidden Opportunities
In balmy Denver July, the market typically slows, and this year was no exception. However, current market conditions have created a scenario where buyers have more negotiating power than they’ve had since the height of the pandemic. The close-to-list price ratio dropped to a still respectable 99.04%, the lowest since July 2020, indicating that buyers may be able to negotiate better deals. The median days on the market were 15 in July, an increase of 15.38% month over month from 13 days and 66.67% from last year’s 9 days. Due to this slower pace, now could be the perfect time to act for buyers, especially if you expect interest rates to drop soon.
Inventory and Appreciation Rates
July inventory tells a few different stories. On the one hand, inventory is up 3.62% from June and a significant 68.03% from this time last year, totaling 10,584 units. New listings slowed 11.58% from June, but were still up 7.58% year-over-year. Even with this uptick in inventory, properties are still appreciating, though not at the rapid rates of previous years. For instance, the average close price for residential properties was $708,937, a slight 1.29% decrease from June, but a 2.34% increase from last July. This environment, in addition to the increased days on market, benefits buyers looking for a more balanced market where they can negotiate and plan their purchases thoughtfully.
Micro-markets and Buyer Behavior
July data paints a complex picture. Generally, more inventory means less competition and lower prices, but activity varies almost street by street. This creates micro-markets where some areas experience a buyer’s market, while others remain firmly in a seller’s market. Some of this can be tied to the fact that many older homeowners aren’t seeing the benefit of downsizing, which limits the inventory of single-family homes especially. Sellers not tied to low-interest rates have a lot more flexibility but may still be biding their time, anticipating a potential rate cut in the fall that could spur buyer demand and increase competition. Homes that are competitively priced and move-in ready tend to sell faster, while those that are overpriced or need significant upgrades linger on the market. Appropriate pricing and making necessary upgrades are crucial in these varied market conditions.
The Fed’s Influence on Mortgage Rates
July’s Federal Reserve meeting significantly impacted long-term mortgage rates. Fed Chair Powell’s tone hinted at future rate cuts, leading to a notable drop in mortgage rates. This, coupled with a 6.41% decline in Denver Metro sales volume in July, provides buyers with a unique window of opportunity before rates potentially drop further and competition increases. Even as early August economic data confirmed this trend, it’s important to remember that mortgage rates often try to predict the future and bake in highly probable outcomes.
As we move into August, the Denver real estate market continues to stabilize. Buyers currently have an advantage with increased inventory and negotiating power. This might be the ideal time to act for those looking to buy before potential rate cuts change the landscape. Sellers should remain patient and strategic, as the right buyer could be just around the corner. Whether you’re buying or selling, staying informed about these trends will help you navigate the market effectively.