Best Opportunity for Buyers in 12 Years: A Deep Dive into the Denver Metro Real Estate Market
September has brought a unique shift to the Denver Metro real estate market, offering buyers a rare opportunity. In over a decade, there hasn’t been a better time to purchase a home, with more inventory available than we've seen in years. Whether you're a first-time buyer or looking to upgrade, this market could offer the perfect conditions for you to make your move. Let’s take a closer look at the latest data and explore how buyers and sellers alike can benefit from the current market dynamics.
Key Market Insights: What the Numbers Tell Us
The most significant takeaway from September’s data is the sharp rise in Months of Inventory (MOI). For the first time in 12 years, MOI has exceeded 3 months, signaling a more balanced market where supply is beginning to catch up with demand. Attached homes now have 4.25 months of inventory, and detached homes have 3.06 months. This shift is especially important for buyers, as it means more options and less pressure to make quick decisions in a competitive bidding war.
But MOI isn’t the only number worth paying attention to. Here are a few other key stats that define the current market:
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Sales Volume Decline: In September, the number of closed sales fell to 3,073, down 12% from August. However, this drop in sales is likely due to fewer business days in the month, and it’s expected to rebound in October. The year-over-year decline was minimal at just 0.4%, meaning overall buyer interest remains strong.
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Pending Sales Surge: Despite the dip in closings, pending sales were up 29% compared to last year, indicating that buyers are still out there and making offers. Detached homes, in particular, saw a 10% month-over-month increase in pending sales, while attached home pendings dropped by 9%. Clearly, buyers are favoring detached properties as they look for more space and privacy.
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Price Adjustments: Perhaps the most shocking statistic from September is the 6.6% drop in average sold prices for detached homes, equating to a $50,000 decline from August. While this might seem alarming, it’s important to note that the drop was primarily driven by the types of homes being sold. The percentage of sales between $400k and $600k increased, while higher-end sales above $700k dropped. This shift in the mix of homes on the market has a significant impact on average prices but doesn’t necessarily signal a broader market trend. In fact, we expect prices to recover by $20k to $30k in October.
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Market-Wide Slowdown: Another notable shift is the increase in median days on market (DIM) across all price ranges. Every price segment saw homes spending more than 20 days on the market in September, highlighting a broad-based cooling of the market. With over 10,000 properties for sale, buyers have more time and more options to consider, a stark contrast to the frenzied market of recent years.
Why Now is the Best Time to Buy
For buyers, the message is clear: act now. With more inventory available than at any time in the last 12 years, buyers have a golden opportunity to secure a home before the end of the year. Here’s why waiting could be a costly mistake:
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More Choices: Inventory levels have surged, giving buyers the rare luxury of choice. No longer is the market dominated by frantic bidding wars. You have more homes to look at and more time to make a well-informed decision.
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Price Discounts: Sellers are increasingly willing to negotiate, offering incentives like closing cost assistance, price reductions, and even temporary interest rate buydowns. This flexibility could save buyers thousands of dollars, making now an ideal time to purchase.
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Market Shift Coming: Waiting until the first quarter of next year could mean facing a much tighter market. Inventory levels are expected to drop by 30% to 40%, and price discounts will likely disappear. In fact, many industry experts expect prices to rise as competition heats up again in early 2024. Don’t miss out on the current buyer-friendly conditions by waiting for a better deal that may not come.
A Strategy for Sellers: Incentives and Timing Matter
While buyers have the upper hand in today’s market, sellers can still succeed by being strategic. If you're looking to sell your home before the end of the year, consider offering attractive incentives to entice buyers:
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Interest Rate Buydowns: For attached homes, a 2/1 temporary interest rate buydown can make your listing stand out. This helps buyers manage their mortgage payments, especially in today’s higher interest rate environment.
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Cover Closing Costs: Offering to pay a buyer’s closing costs can also sweeten the deal. In a more balanced market, this type of incentive could be the key to getting your home sold quickly.
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Timing is Key: If you're able to wait until early next year to sell, it may be worth holding off. Inventory is expected to decrease dramatically by February or March, creating a more competitive market for sellers. This could drive prices higher, allowing you to secure a better sale price.
For sellers who want to buy a new home now but wait to sell, Corken + Company offers the Buy Before You Sell Program. This program allows you to purchase your next home while giving you time to list and sell your current property in a more favorable market. If you close by November 30th, you can list your home at the end of December, just in time for the influx of buyers that typically hits the market in January. This could be a winning strategy for those looking to make a move without rushing into a sale during the slower winter months.
The Road Ahead: Volatility and Opportunity
This year has seen its fair share of market volatility, with prices fluctuating from month to month. However, when we look at the year-to-date numbers, the overall trend is more stable. Year-to-date average sold prices for detached homes are up 2%, and median sold prices have risen by 2.6%. While individual months may show sharp swings, the broader market is still moving in a positive direction.
Conclusion: Take Action Now
For buyers, the message is simple: don’t wait. With the highest inventory levels in years and sellers offering incentives, now is the time to act before the market tightens again in early 2024. For sellers, offering incentives and carefully timing your listing can help you succeed in this more balanced market.
