Market Overview
Headline: “Metro Denver Makes a Hard Shift to a Buyer’s Market.”

Another one: “Denver’s Real Estate Market Softens Greatly.”

Oh, no, the sky is falling! Yep, those are definitely attention-grabbing headlines, which is their objective. However, my perspective differs, based on the data. 

“Hey, Brad, how’s the market?” That’s a question I’m asked weekly. My answer usually begins with, “It depends on which area you’re asking about.” Why? Because real estate is hyperlocal, and the one-size-fits all message doesn’t justify the complexity of our market. 

For example, central Denver has cooled significantly, with such areas as LoDo, Cherry Creek, Sloan's Lake, and The Highland showing five to eight months of inventory. Meanwhile, suburban areas to the north, west, and southwest of the metro are experiencing a surge, with months of inventory between only one and two months. 

The Rub
The hard part to overcome is that for anyone who bought a home, sold a home, or both between 2014 to 2022 — and especially from 2019 to 2022 — the only market you know is one that was hyper-competitive and favored sellers heavily. The last two years, however, have represented a shift toward a more-normalized market, with nuanced hot and cool zones. I boldfaced the words “more-normalized market” because that is what we’re in; not a bad market or a poor market or a hyper-slow market.

Inventory and Negotiating Power
Inventory is the highest it has been in 11 years, and historically, it will continue to grow through October. This means buyers have more negotiating power and choices than at any point during the last decade and that homes probably will continue to experience price reductions and longer days on the market. However, the market overall is maintaining and is not bad.

Sales and Prices
The number of homes that closed during September — 2,391 — dipped 12.5% compared to the previous month, suggesting a more-balanced market. The median home price declined by 3.8% to $625,000, which is 2.3% lower than September 2023’s median price of $640,000.

Interest Rates
The Fed cut the lending rate in September, and the 30-year fixed mortgage rate dropped to about 6.25%, the lowest point of the year. This factor reignited buyers’ interest, although the rate increased about two weeks ago. As always, we’ll continue to watch interest rates closely.

Accurate Pricing Matters
Pricing a home at or below market value is so important, instead of pricing it above market value, allowing for “wiggle room,” and dropping the price to where it should have been but then dealing with the stigma of a “stale” listing.

Here’s a repeat from the last five months: I've noticed a healthy amount of all properly priced single-family homes went under contract within their first week on the market — with some receiving multiple offers. Meanwhile, the other half often lingered on the market for 30 to 60-or-more days. Again, the proper listing price and specific location — city, zip code, or neighborhood — matter.

My Monthly Mantra
I believe Months Supply of Inventory is a true yardstick of the real estate market. A "balanced" market has at least three months and up to six months of supply available. In other words, if, starting today, no sellers were to list their home for sale, then — according to the definition of a balanced market — all the for-sale homes would sell in three to six months.

That figure was 2.8 months in August and in September. Thus, our supply of inventory remained much higher than it was in September 2023, meaning we’re near a balanced market.

Tidbits

• Seller-paid concessions continue to be prevalent in many closed transactions, with a notable average amount primarily used for buyer’s closing costs or interest rate buy-downs.

• Average and median days on market increased, with homes taking longer to sell than in recent years. The average number of days to receive an offer was 37, up from 29 days in September 2023.

• The number of closed transactions decreased last month; meanwhile, the number of pending transactions increased last month. That stat signifies that although homes are going under contract, many of the transactions were terminated, for such reasons as the buyer’s loan didn’t materialize and buyers and sellers couldn’t resolve home inspection items.

Note: Days on market can be skewed by how the MLS processes new-construction homes.