denver housing market slowdown gives first-time buyers new opportunities
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By Sara B. Hansen | Published on October 13, 2023
September’s Denver Metro real estate market experienced a seasonal slowdown, with new listings, pending sales, and closed sales declining.
Although closed sales dropped about 20% from August, prices held steady at a median of $585,000, according to September’s monthly report from the Denver Metro Association of Realtors.
First-time homebuyers not tied to historically low-interest rates are leading the charge on purchases, said Libby Levinson-Katz, chair of the DMAR Market Trends Committee.
“In many ways, this is the perfect market for first-time homebuyers to seize opportunities,” she said. “While interest rates are high, these buyers can negotiate instead of jumping into bidding wars where they might pay 10 percent over the asking price to secure a property like many did over a year ago.”
Although the average close-to-list-price ratio is down year-over-year by almost 5 percent to 99 percent, more buyers want concessions like buydowns to reduce their interest rates instead of haggling on price.
Looking ahead
At the end of September, active listings increased 11.24 percent to 7,629. That’s still about half the average number of listings for September (15,453 from 1985-2022) and significantly below the record high of 31,450 in September 2006.
The median days on the market increased by 27% in September to 14 days.
While many sellers don’t want to lower prices, starting too high can cause the home to sit on the market longer, making potential buyers worry something is wrong with the house.
The realtors association also suggests sellers planning to list homes now or in the next few months prepare now by getting pre-inspections of the roof, air-conditioning, and sprinkler systems before snow falls.
Luxury market
Colleen Covell, a market trends committee member and realtor at Mile Hi Modern, said there are nearly five months of inventory for homes in the $1.5 to $1.99 million. In comparison, there are more than six months of inventory for homes priced over $2 million.
“This portion of the market has finally tipped into a balanced — if not a buyer’s — market for the first time in recent memory,” she said.
With homes priced over $1 million taking 34 days to sell, buyers have more negotiating power and could get their dream home under the asking price.
“Sellers need to appreciate that the market has shifted significantly in this segment, and correct pricing is critical to a quick sale.”