Unpredictable Trends & Shifting Dynamics Amid Seasonal Slowdown
July is the time of year when we historically see the Denver real estate market slowdown. With kids out of school, people on vacation, and others enjoying the city’s warm weather and outdoor activities, real estate transactions often take a back seat. However, this year, the market has been as unpredictable as Denver’s weather. As the saying goes, if you don’t like the weather, wait five minutes—a sentiment that seems equally applicable to the housing market. Sellers may need to exercise patience, as even amazing properties can sit on the market, while less remarkable homes sell quickly, leaving many scratching their heads.
Many local real estate agents feel we are transitioning into a buyer’s market. This shift is difficult to define, as the pandemic has upended our traditional understanding of what constitutes a seller’s market versus a buyer’s market. Statistics suggest we are moving toward a balanced market (4-6 months of inventory), with 2.86 months of inventory steadily increasing throughout the year. However, in certain price ranges and neighborhoods, the market has clearly become a buyer’s market due to a wide variety of options. It’s important to remember that real estate is hyperlocal, and many factors can influence each home for sale. Beyond the usual aspects like location, size, and condition, factors such as interest rates and the size of the buyer pool can make one home a hot commodity while another sees less interest.
Active listings rose 3.62 percent month over month and an impressive 68.03 percent year over year, reaching 10,584. Year to date, active listings have increased between 44 percent and 161 percent compared to the previous three years. However, to put this in perspective, the average number of active listings for July from 1985 to 2023 is 15,502. The record high for July was in 2006, with 31,989 listings, and the record low was in 2021, with just 4,056 listings. Historically, the average increase in active listings from June to July is 5.41 percent. This July’s 3.62 percent increase suggests a slower-than-expected rise, indicating that our seasonal inventory peak may be approaching. Meanwhile, pending sales remained relatively steady with a slight 0.18 percent decrease to 3,896, and closed sales dropped by 5.19 percent to 3,708.
Info for Sellers
Buyers are becoming increasingly practical and discerning, appreciating improvements and upgrades related to energy, water, and space efficiency. In July, many buyers found their dream homes and negotiated fair purchase contracts, as sellers felt the pressure of longer days on the market. With rising inventory levels, buyers have been able to negotiate more favorable deals, resulting in the lowest close-price-to-list-price ratio seen year-to-date since July 2020. Sellers now is the time to highlight the unique features and upgrades of your property and price it competitively to attract discerning buyers. Don’t miss the opportunity to stand out in this shifting market!
Info for Buyers
As the summer selling season winds down in August, the changing marketplace provides an ideal opportunity for buyers. With increased leverage in negotiations, this period offers a prime chance to find a new home before prices potentially rise again. If you’re in the market, now is the time to act—take advantage of the favorable conditions and secure the best deal on your new home!
The anticipation of a potential rate cut in September is influencing both sellers and buyers. Buyers are waiting on the sidelines, hoping to capitalize on lower rates, while sellers are holding off on adjusting prices, expecting the market to “improve” once rates drop. This cautious optimism from both sides is shaping the current dynamics, as everyone waits to see how the market will respond to the anticipated change.
*We use reasonable efforts to include accurate and up-to-date information. The real estate market changes often. We make no guarantees of future real estate performance and assume no liability for any errors of omission in the content.