Despite limited inventory, prices drop, time on market increases
With interest rates rising, the Denver housing market is cooling off, and sellers are starting to feel squeezed.
The days of multiple offers thousands of dollars over list price vanished, and homes take longer to sell despite continued limited inventory.
According to the Denver Metro Association of Realtors Market Trends Report, the average new listing went under contract in 19 days in August, up from 13 in July to 10 in June.
“All of the major statistical categories are pointing to the market slowing down,” says Andrew Abrams, chairman of the DMAR Market Trends Committee.
August recorded a 5.9% decrease in closings compared to July and a 30.2% drop from the previous year. Active listings at the end of August were also down 7.4% from July.
Sellers listed 3,694 single-family homes in August, down from 4,300 in August 2021. The number also decreased from 4,556 in July and 5,675 in June.
A return to balance?
Greg Hriso, a Homie Colorado real estate agent, says the market is becoming more balanced as economic uncertainty keeps some buyers at home.
“Homes are still getting multiple offers but there are fewer of them, so buyers have a real opportunity to find a home they love and get under contract,” he says.
He predicts home prices will stay flat or drop, but he expects them to fall.
“Between the economic uncertainty, the election and the time of year, we could see a larger than normal drop,” he says.
“It won’t wipe out the year over year gains but month to month could look a little more interesting.”
Bonnie Hissey, a real estate agent with HomeSmart, told Business Insider the changing market is healthier because the bidding wars of the past few months created unsustainable prices and frustrated buyers.
“It was long overdue and, in my opinion, welcome to try and get some balance back in the market,” Hissey says.
Shifting to a buyers’ market?
Real estate tech firm Knock says Denver’s housing market could become a buyer’s market by mid-2023, if not sooner.
“Denver is now a neutral market. Prices are getting softer. We think it is headed to a buyer’s market,” says Sean Black, co-founder and CEO of Knock, a New York-based “Power Buyer” that helps consumers make cash home offers.
Nearly all the 100 largest housing markets moved more in favor of buyers in July, with the most significant shifts coming in Boise, Idaho; Phoenix; Colorado Springs, and Austin, Texas, according to Knock’s inaugural “Buyer-Seller Index.”
Hissey predicts patient buyers can save money because the best time to buy a house in Denver is between Thanksgiving and Christmas.
“If somebody has to sell at that time of year, they’re usually much more desperate than somebody who puts their house on the market in January or February.”
Source: https://www.denverpost.com/