Denver’s real estate landscape is shifting as inventory levels rise, sales slow down, and sellers accept less than their asking prices. Despite these changes, the dream of homeownership in the Denver metro area is becoming increasingly expensive.
The monthly Denver Metro Association of Realtors Market Trends report for November, which covers October’s real estate activity, was released recently. This comprehensive report examines both monthly and yearly trends in the Denver metro area’s real estate market, spanning the 11-county metro Denver region, including Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park counties.
One notable trend is the decline in new listings, which saw a significant drop of nearly 17% last month, totaling 3,816 listings. The Denver Metro Association of Realtors suggests that this dip is typical for this time of year and aligns with the figures from November 2022. Year-over-year, new listings showed a modest 0.65% decrease.
The number of active listings at the end of the month stood at 7,482, representing a 2.6% year-over-year increase but a 1.9% decrease from September.
Sales in the housing market are also experiencing a slowdown. The number of homes sold last month decreased by 11.6% compared to the previous month, totaling 2,986 sales. October marked a 15.7% year-over-year decrease in closings. Sales volume fell by 11.7% last month to $2.05 billion, with a 12% year-over-year decrease.
Despite the slowdown in sales, residential prices remain on an upward trajectory. The median close price for homes in October was $585,000, holding steady from September but reflecting a 2.6% increase from the previous year. Single-family homes had a median sale price of $649,000, marking a 1.4% month-over-month increase and a 3.8% year-over-year increase. Condos also saw gains, with the median sale price rising by 1.2% from September to October and nearly 5% from the previous year, reaching $425,000.
On average, residential properties sold for $687,917 in October, a slight decrease from September but a 4% increase from 2022. Single-family homes had an average sale price of $772,601 last month, representing a marginal month-over-month decrease but a 4.5% year-over-year increase. Conversely, Condos had an average sale price of $485,580, marking a 1% increase from September and an almost 2% increase from October 2022.
Libby Levinson-Katz, DMAR Market Trends Committee Chair, emphasized the importance of considering historical data. She noted that this year’s performance closely aligns with pre-pandemic levels in 2019, with a sales volume exceeding $24 million and a median days-on-market of 11 for 2023, just one day short of 2019.
However, Levinson-Katz urged sellers to adjust their expectations, as buyers are no longer willing to overpay. Close-to-list-price ratios have come down to around 99%, compared to the 103% observed during the pandemic. As revealed in the November report, sellers are increasingly accepting offers below their asking prices.
With growing inventory towards the end of the year, buyers now have more choices in the market. Levinson-Katz advised that setting the right price and offering turnkey properties are crucial for successful sales.
The median days on the market for single-family homes and condos increased by more than 14% in October, reaching 16 days, which marks a nearly 6% year-over-year decrease.
In this changing real estate landscape, concessions are becoming a standard tool for negotiation. Andrew Abrams, a DMAR Market Trends Committee member, noted, “Buyers can use concessions to decrease their interest rate or put them toward closing costs or pre-paids.”
As Denver’s real estate market continues to evolve, buyers and sellers must navigate these shifts and adapt to changing dynamics to pursue their real estate goals.