Fall Real Estate Market Update for Central Denver – Challenges and Opportunities As the cooler...
As Denver homes have managed to hold their value even in this era of higher interest rates. The 12-month rolling median price for central Denver homes is $880,000, slightly below the February historic high of $900,000 and on par with September 2022.
Although prices remain relatively steady, other market indicators have changed. The number of homes sold through August is down 28% compared to the previous five-year average for the first eight months of the year. Higher interest rates are discouraging homeowners from listing their low-interest-rate financed homes, thus reducing supply. Buyers, feeling the squeeze of the higher rates, are exiting the market, thus reducing demand. Buyers that are shopping are taking more time before writing an offer.
The average number of days for a home listed in the MLS to go under contract is 28 days, up 23% compared to the previous five-year average. However, when we remove the unicorn years during the pandemic, the average is the same as the 2018 through 2020 time frame. This is another indicator that the market is returning back to a more normal state.
Sellers started this year with higher expectations of the value of their homes than buyers were willing to deliver. In January, the close price to the original asking price was 93.5%. This is the most significant divergence in monthly buyer-seller expectations for the past ten years. As you can see, the expectations of buyers and sellers have normalized and are in line with the average list-to-close price ratio for the past five years, except for 2021, when the ratio peaked at 101% for the year.
September Buyer Tips: Buyers are wise to pre-qualify for financing or, better yet, find cash to bring to the table. In cases where financing is being used, we are seeing buyers get creative and negotiate seller concessions like rate buy-downs in around 50% of closings, according to one lender I work with.
September Seller Tips: Well-priced, quality homes will sell quickly and often at higher than asking price. Sellers should take care of all objectionable items before going on the market. While we are seeing houses sitting on the market longer, houses that sit for more than ten days may become stigmatized and require repositioning in the market before a successful sale.
If you're in the market to buy/sell a home, or you just want to chat about real estate, let’s connect! I'm happy to share market resources, vendor referrals, or anything else that would be helpful in your journey.
Michelle Fitzgerald
Real Estate Broker, Realtor®
email: michelle@michellesellsdenver.com
Instagram: https://www.instagram.com/michelle_sellsdenver/