Denver’s real estate market is dynamic, embodying a critical balance between challenges and opportunities. While the anticipated seasonal slowdown hit Denver in October with a 16.84% decrease in inventory month over month, active inventory was actually up 2.63% from last year. Buyers who have anxiously awaited this inventory are now faced with affordability challenges as mortgage rates remain around 7.5% and home prices stay steady. The median home price in Denver stayed even month over month and has only dipped 2.03% year over year.
October witnessed the traditional seasonal shift across Greater Metro Denver’s residential market. Closed listings were down 11.58% from September and 15.72% from last year. Buyers are taking their time, but are still paying a premium for Denver real estate. The last time buyers had this much inventory in the fall, was in 2019. This requires adjustments in strategies for both buyers and sellers. Sellers must be patient and price their homes appropriately to entice buyers facing high interest rates and increased options.
Meanwhile, affordability challenges persist as mortgage rates remain high, leading to a 9% drop in mortgage purchase applications. Despite a 2% decrease in the median home price from the previous year, it remains 38% higher than 2019, indicating a strong and resilient market. One influence on valuation that is important to consider is Wall Street. Some analysts predict that Wall Street could own 40-60% of single-family homes by 2030. Because these institutional investors have access to lower rates than even the most qualified individual buyers, they will continue to drive increased prices and sustained demand. Our advice for individual buyers is to talk to your lenders often. Small rate changes and unique lending products can make a big difference in affordability.
Denver’s real estate market, marked by seasonal fluctuations and economic uncertainties, demands strategic navigation. Despite challenges, the market offers opportunities for those who approach it with a balanced blend of caution and optimism, the American dream of home ownership is a long-term investment.