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As we enter the halfway point of the year, the once-predictable Denver metro real estate market feels topsy-turvy. Active listings rose 11.52 percent month-over-month to 10,214, a 68.27 percent jump year-over-year. Most notably, active listings are the highest they’ve been year-to-date over the last few years, showcasing that inventory is climbing. Buyers have shown they are tired of the breakneck speed of the market over the past few years and are now taking their time. While some homes leave the market with multiple offers, many more sit for days, weeks or even months before finding a buyer. These purchasers are also eager to negotiate, even when a home is brand new to the market. If sellers are motivated, they will engage in negotiations. However, home sellers who aren’t quite as motivated may wait longer for the right buyer.
“A once reliable market with a peak selling season in June has taken a detour,”commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “The main culprit of higher interest rates is easy to identify. However, there seems to be a disconnect between buyers and sellers. Buyers think it’s 2008, sellers think it’s 2021, and renters think rates will return to three percent. While none of this is true, the increasing inventory is moving towards a balanced market with the current months of inventory sitting at 2.78.”
Speaking to the topsy-turvy feeling of the market, new listings declined 16.38 percent to 5,825. This is notable as the Denver Metro typically does not see a decline in activity until later in the summer due to the start of the school year, high temperatures and buyer fatigue. Meanwhile, pending sales increased 1.43 percent, and closed sales dropped 17.07 percent while median days in MLS rose 33.33 percent to 12 days. Increased pending sales seem to be contradictory to a rise in inventory and days in MLS, but they do indicate a market that is simply moving forward to the beat of a different drummer.
ContinuedLevinson-Katz,“It is possible that we are simply experiencing a calm before the storm. Many consumers are holding off until the fall to align with the projection of lower mortgage rates. While the market typically slows down ahead of a presidential election, we may find ourselves in the throes of a bustling market this election cycle.”
DMAR’s monthly report also includes statistics and analyses in its supplemental markets that include properties sold for $1 million or greater, properties sold between $750,000 and $999,999 and properties sold between $500,000 and $749,999.
Breaking with the historical trend of high-priced sales in June, last month featured some of the most sluggish sales activity the $1+ million market has seen in years. With showing activity virtually coming to a standstill in the highest-priced segments, sellers and listing agents were left scratching their heads.
Sellers at all price points in this segment felt the sharp decline in market activity. The number of closings in June plummeted almost 50 percent from May for attached homes at 45.45 percent. Detached home sales also fell significantly, by 26.72 percent, in the $1.5 million to $1.99 million segment and 20.62 percent for homes priced over $2 million.
Homes sat for longer in June, with median days in MLSup 25 percent from last month. Prices declined as well, with the average price-per-square foot dropping to $375, 2.60 percent lower from this time last year. The number of new homes hitting the market also decreased 15.21 percent from May, as did pending sales, down 7.33 percent.
This higher-priced segment saw the greatest amount of sales competition. Sellers in June faced almost seven months of inventory for detached homes priced over $2 million at 6.97 months, while attached sellers faced 4.57 months of inventory. Sellers of homes priced $1.5 million to $1.99 million also suffered with 4.2 months in detached homes and 5.83 months in attached.
“The $1+ million segment is now a full-blown buyer’s market,” commented Colleen Covell, DMAR Market Trends Committee member and Metro Denver Realtor®. “Sellers in this market will be left out of the summer fun unless they update their home before listing, price conservatively and expect to pay a closing concession. Otherwise, they will be sitting idle throughout the long dog days of summer.”
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