Up, Down, and Sideways
The end of summer always feels a bit unsettled to me. Some things are ending – like hanging out by the pool or taking off on a spontaneous camping trip. Other things are beginning – school most notably if you’re a parent, as well as a renewed focus on work-related goals. It can leave me feeling pulled in a few different directions at once, waiting for things to work themselves out.
The metro Denver area’s real estate market also seems to be experiencing some of this unsettledness. Here’s a look at the August market update and what it may mean for buyers and sellers. (Statistics are for the market as a whole — combining single-family homes and condos/townhomes — and are courtesy of the Denver Metro Association of REALTORS® Market Trend Report for August.).
Denver Metro Area Real Estate Market Update: Statistics
- While we saw a slight dip in Active Listings in July compared to June with 161 fewer units available, the total inventory of homes is up 22.45% over last year.
- The number of New Listings was also down in July vs. June (12.37% or 936 fewer units) but up 2.54% over last year.
- Across the Denver metro area, 157 fewer homes went Under Contract in July compared to June. Even with this month-over-month downturn, the 5,944 homes Under Contract in July represented an increase of 9.63% compared to this time last year.
- Average Days on Market crept up slightly, from 24 days in June to 25 days in July. This time last year, the Average Days on Market was only 21…so that 25 days represents an annual increase of 19.05%.
- The total number of units Sold decreased by 6.19% from June to July (5,772 in June vs. 5,415 in July). This is also a decrease compared to this time last year – there were 5,554 units Sold in July 2018, resulting in a 2.5% annual drop.
- The Median Sold Price rose 1.17% in July, from $429,000 to $434,000. That’s an increase of 4.58% compared to this time last year.
- The ratio of Close Price to List Price dropped 0.30%, from 99.62% in June to 99.32% in July. The ratio a year ago was 100.7%, meaning that in July 2018, homes sold for slightly more than list price. As the ratio drops below 100, it indicates that homes are selling for less than list price.
What the Statistics Indicate for Buyers and Sellers
The indicators that seem to tell us the most about where the market is headed are Active Listings, Average Days on Market, Sold, and Close Price/List Price. Taken together, these tell me that we are moving toward a buyer’s market. We’re not there yet, but we’re closer than we’ve been in quite a while.
Implications for Sellers
More inventory means sellers are facing more competition. And with more developers completing new homes, that’s going to increase. Sellers are making price reductions (see that Close Price/List Price ratio) and are having to give more, whether that’s in price concessions or on inspection items.
It’s not all doom-and-gloom, however. The key takeaways for sellers are:
- Do your own pre-listing inspection and take care of any repairs that could cause buyers to hesitate.
- Price your home competitively to attract more potential buyers faster and help drive that days-on-market number down. (See “Advice for Sellers in a Softening Market” from last month for an in-depth discussion.)
Implications for Buyers
More inventory means more homes to choose from, including new builds coming on the market. Low interest rates — averaging 4% on a conventional 30-year fixed – mean more purchasing power. Higher average days on market means sellers may be more willing to negotiate. Combine this with the price decreases and this is a good time to be a buyer.
It’s not all peaches-and-cream, however. The key takeaways for buyers are:
- Get your finances and credit in order if they aren’t already (more on that in the coming weeks).
- Get pre-approved for your mortgage so you can jump on that well-priced home.
- Make sure you choose an experienced REALTOR® who knows your market inside-out and is a Certified Residential Specialist (psssst…that’s me!)
Time to Sell? Time to Buy? Time to Call Me
No matter what your goal is in regard to real estate, I can help you achieve it. With 15+ years of experience, advanced training, and consistent 5-star reviews, I am perfectly positioned to guide you to a successful closing. Give me a call at 303-204-6494.