homes are staying on market longer in the Denver metro. That’s good news for cash buyers
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By Sarah Mulholland | Published on October 4, 2023
The inventory of homes for sale in metro Denver is piling up as higher interest rates make it harder to buy a house.
Active listings at the end of last month rose 11.2% with new listings significantly outpacing pending sales, according to a report from the Denver Metro Association of Realtors.
It’s not unusual for listings to climb at the end of summer. Families are settled into the school year, which spells the end of the peak home-buying season. But historically, listings are up less than one percent at this time of year.
The number of homes sold in September plunged 20%, the report shows.
Colorado’s housing market is cooling as federal regulators raise borrowing costs to bring down inflation.
Potential homebuyers are facing sticker shock on their monthly payments with mortgage rates over 7% for the first time in decades.
More homes on the market should be a good thing for people that have the cash to buy. But home prices still haven’t come down all that much even as the market stalls out.
“Prices are still strong in the Denver Metro area,” realtor Libby Levinson-Katz write in the report.
The median price for a home in the area, which includes Broomfield and Boulder, is still out of reach for many families at $585,000. Looking at the data for all homes sold so far this year, prices are down about $15,000 from $595,000 at the same time in 2022. But it still costs a lot more to buy a house than it did before the pandemic-fueled real estate boom. In 2019, the median price for a house in metro Denver was $420,000.
But cracks in Colorado’s largest housing market are beginning to show. Homes are sitting for longer, and buyers aren’t afraid to ask for concessions, according to the report. Sellers should be prepared to lay out cash to help offset higher mortgage rates.
First-time homebuyers do have a key advantage in the current environment, according to Levinson-Katz.
Unlike people who already own a home, they aren’t handcuffed to a rock-bottom interest rate. People that bought a home or refinanced a mortgage in the past several years locked in mortgage rates at 3% or less and are loathe to give that up.
“[First-time homebuyers] aren’t tied to historically low interest rates and feel the freedom to move as the current interest rates are all they know,” Levinson-Katz said.