Market Exhibits More Opportunities for Buyers
As the Denver market normalizes, active inventory declined slightly to 7,290 homes on the market at month’s end. However, this is an increase of 115.94 percent year-over-year. While this number reads as a jump, the current inventory is still less than the pre-pandemic inventory numbers of 8,557 active listings in November 2019.
Rising inflation and interest rates are undoubtedly changing the landscape of the market showcased in new listings, which declined 26.73 percent from last month and 27.92 year-over-year. As a result, metro Denver saw its first small decline in average and median sales prices this month. However, sales prices skyrocketed over the past two years, so as a result, the market is well ahead of historical appreciation metrics of where the Denver market should be had it not experienced a pandemic-fueled buying frenzy. Overall, while prices flatten out, the historical appreciation that sellers have seen cannot be ignored.
“There are opportunities to look at the silver lining of every scenario,” said Libby Levinson-Katz, Chair of the Denver Metro Association of Realtors (DMAR) Market Trends Committee. “This evolving marketplace allows buyers more options and the gift of time to decide on a home while negotiating terms that suit their needs. Meanwhile, sellers can analyze the marketplace to position their homes correctly due to rising prices over the years. While the market changes, the past two years continue to represent the exception and not the rule. If one was to remove 2020 and 2021, the metro Denver market trajectory is on pace with where it was predicted to be, had COVID 19 not happened.”
As prices adjust, the median days in the MLS continues to increase, up 240 percent from five days last year to 17 days this year. The luxury market saw the number of new listings and closings decrease dramatically, and close-to-list-price ratio increase from the previous month. Throughout the month, listings decreased by 28.69 percent compared to the previous month.
The market shift changed the dynamic between sellers and buyers. Months of inventory for single-family detached properties is 3.43 and for attached properties is 3.08. The luxury market has the highest months of inventory out of any price point. This change shows that the demand for this type of property has proportionally decreased more than the supply. The increased months of inventory translated to buyers having more negotiation power with appraisal and inspection disagreements.