Market Fun Facts (09/01/23): Summer is hanging on and fall is just around the corner! How will the market look as we enter into the final month of summer? To answer this question NeXstep continues to monitor inventory levels across the 6 County Denver Metro. For the sixth month in a row this year we see an increase in inventory levels; active listings are up to their largest totals of the year at 7,046 active homes for sale. However, this time last year we had 7,670 active listings in Sept of 2022. However, Sales are up for a total of 3,910 sold homes in the past 30 days keeping our absorption rate about the same at 1.85 months similar to our January/February levels. Jefferson county remains the lowest absorption rate at 1.46 months and Adams county has the highest rate at 2.07 months. Denver County leads with the most active listings at 1,733 and Broomfield County continues to have the fewest listings at 199. Current publications indicate a balanced real estate market would need a minimum of 18,000 listings. Thinking about selling…let’s talk!
What do these numbers mean? To help understand what these numbers mean to our local markets we are now including the number of sold comps during the past 30 days or 1 month. Looking at our sold numbers over the past month allows us to calculate a monthly absorption rate. An absorption rate tells us how many months it would take to sell off our entire inventory should we have no new listings. A balanced market is considered 6 months.
Ahead of National Trends
The Denver Metro historically leads National trends, exiting the “Great Recession” ahead of the rest of the country and experiencing a surge in real estate sales during the early days of COVID-19 while the rest of the country tried to find its bearings. Flash forward to this current market, and Denver Metro is again proving its ahead of current national trends with inventory slowly growing and inching closer to a balanced market that gives buyers and sellers equal footing.
Active listings in September saw an increase of 7.2 percent from August, with the month-end total reaching 9,125, a 19.4 percent increase year over year (YOY). The number of new listings added to the market increased by 16.1 percent compared to August and totaled 4,733 in September – up 27.3 percent YOY. New listings increased 1.74 percent and pending sales increased by 0.76 percent month over month. More notably, active listings at month’s end increased 8.87 percent month over month to 6,858 while pending sales declined 13.91 percent and closed volume declined 16.11 percent. Activity is slowing slightly with inventory increases. The median close price dropped 1.36 percent from $590,000 to $582,000 and median days on market increased 22.22 percent to 11 days.
“Buyers feel the shift and think that we are no longer in a full-price market,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “Median days on market increasing to 11 days may seem benign, but it also means homes are sitting on the market for 70 days or more. As a result, buyers want to negotiate on price and receive a concession for a rate buydown. Close-price-to-list-price ratio remains in the 99th percentile, showcasing buyers and sellers are coming together to make sales happen without huge negotiation swings. Pricing in this market is a science. If a home is priced correctly, or even under market, it may still receive multiple offers. However, if the price is slightly high then days on market climb until you find the right buyer, or the right price.”
Months of inventory for detached homes under $1 million sat at a month and a half to just shy of two months, while above a million dollars, the months of inventory sits at roughly two and a half months and increases to 5.79 months of inventory with $2 million plus. The best-performing price band for both detached and attached homes was $750,000 – $999,999 with an increase in sales month to month of over three percent.
Special thanks to Denver Metro Association of Realtors for the market stats/narrative.