The Denver real estate market is undergoing a period of adjustment as buyers face continued rate increases and sellers manage the higher expectations of buyers. The height of summer often marks the beginning of a slower season in Denver as buyers and sellers navigate summer vacations and the increasingly warm weather. Despite this, we are seeing home values in Denver persist. The close-to-list price ratio is still hovering above 100% at 100.23%, and median home prices are down 1.94% to $600,000, even as mortgage interest rates sit consistently over 7%.
Buyers and Sellers
It seems that once buyers got comfortable at rates over 6%, mortgage rates started sitting over 7%. This, combined with high construction costs, has understandably made buyers incredibly discerning. We see this reflected when homes that are very similar on paper spend vastly different amounts of days on the market. Homeowners can prepare for this by staying on top of home maintenance now, even if they don’t plan to sell in the next year.
Inventory and Pricing
While active listings in June were up 16.11%, new listings were up only 8.69%. We continue to see homes that require even simple cosmetic upgrades, as well as those in tricky locations, spend more time on the market and often require price reductions. As you can tell from the close-to-list price ratio, the homes in desirable locations, with the upgrades buyers are looking for, buoy these numbers. 41.1% of detached homes sell above the asking price, 4.7% fewer than in May. Likewise, attached residences declined by 2.0%, with 37.4% of homes selling above the asking price. While multiple offers are less prevalent than in previous years, a well-suited home in an optimal location can still ignite intense competition among buyers.
The discerning buyer pool we discussed is not only finding wins in pricing, but is asking for more when it comes to inspection resolutions and inclusions. With this shift in the market, it presents an opportune moment for buyers to make their move in a less competitive environment. The decreasing intensity of multiple offers and the potential for price adjustments can provide buyers with more favorable conditions to explore. If buyers can find homes that fit their needs and budgets despite the current mortgage interest rates, they can avoid the 2024 spring/summer season, which many predict will be as competitive as the Denver market has ever been.