What are we seeing right now in the market here in the Denver metro area?
In August, active home inventory grew by 93% year-over-year, the average days on market increased to 19, and the median/average prices still appreciated (but at a much smaller rate as expected). Make no mistake – we definitely saw demand soften across the Denver metro area as evidenced by the drastic drop in showings to pre-pandemic levels, a nearly 20% drop in pending sales year-over-year, and a 30% drop in closed sales year-over-year. Thankfully (or disappointingly, depending on your status as a buyer or seller), we are finally seeing the close price to list price percentage drop below 100 – meaning homes are selling BELOW list price for the first time on average in a long time! Buyers appear to be more selective in homes they are pursuing and with the prices they are willing to pay. If you’re a seller doing a price reduction on your home sale, you are not alone. Price reductions are on the rise.
If price reductions are on the rise, are seller concessions as well? A seller concession is money that a seller offers in the contract towards the buyer’s closing costs. With multiple offer situations on the decline (less competition), buyers have more opportunities to ask for money towards closing costs (could even help with buying down an interest rate). In a recent DMAR report, they shared data on how often we’re seeing seller concessions included in transactions: In July 2022, 29.2% of the properties that closed paid a seller concession. This shows a 6.3% increase from last July. The average concession was $5,015 compared to $3,761 last year. A sampling of August’s data shows the closing percentage with a concession around 35.7%, up about 6% from last month.
I’ve also included a link to a bonus Denver Business Journal article detailing where people moving into the Denver area in recent years were moving from. I thought it shared some pretty fascinating information so I wanted to share with you. Go check out that article here:
DBJ Article Link
DBJ Article PDF
As always, reach out to me with your real estate questions. My team and I will also be ready to serve you across the Front Range from Fort Collins to Denver to Colorado Springs and the foothills!
– Drew Morris