The Denver Real Estate Market in August 2023
Looking at data for Denver real estate, the market remained relatively quiet month-over-month and compared to 2022. This time last year, interest rates were on a steady incline with August crossing the 5% mark. In response, the real estate market slowed down significantly.
A more even playing field year-over-year now makes it easier to compare numbers and not see such drastic differences in price and activity.
Taking a look at detached, single-family homes, new inventory decreased only slightly, by 6.9% year-over-year. The median home price actually increased slightly from $645,000 in 2022 to $650,000 last month. Not major, but not a decrease as we've often seen this year. Average days on the market increased from 20 to 26 year-over-year, but homes at one point (2021 especially) were only on the market for 2-3 days.
Compared to July, new inventory increased by 1.8% and prices remained flat. Again, the summer is a slower time of year with last-minute vacations combined with kids going back to school sidelining buyers and sellers alike in August.
Now, the standout stats in the detached market are pending and closed properties. Just 2,736 homes went pending in August, 2.7% higher than July but 14% below 2022 numbers. In addition, 2,632 homes closed which is 2.7% lower than July and a decrease of 16.5% year-over-year.
So, while low inventory is a well-known and ongoing issue, buyers are also holding off due to higher rates and reduced affordability. And that's keeping prices from taking off like they did during low-rate times.
As for attached homes, such as condos and townhouses, there were 1,424 new listings. That's 4.4% below 2022 but a slight uptick compared to July. And while prices were basically the same month-over-month, the median price of $419,950 was 5% higher than last year's $399,900.
According to Libby Levinson-Katzs, Chair of the DMAR Market Trends Committee, the Denver real estate market is continuing to adjust to a variety of factors affecting the market but sees further balance on the horizon. As of right now, here's what she has to say:
"For serious buyers who have their financing buttoned up, there are a number of opportunities available...The important message is that sellers are eager for qualified buyers to make an offer. It's critical to make sure buyers understand their buying power before they start looking at properties.
FHA loan applications are on the rise, there are first-time homebuyer down payment assistance programs available and assumable loans are quickly becoming an advantageous marketing incentive. The key to success in real estate has always been to buy what you can affor and then hold on to it for as long as you can."
While Denver real estate slowed for the summer, fall is coming fast and we typically see a slight rebound in activity after Labor Day. With an expert to provide guidance, buyers still have plenty of room to negotiate and explore their financial options right now. Looking to sell? Make sure you have an advocate to prevent or minimize the need for concessions that might hinder your return on investment.
What You Need to Know About Home Inspections
In the not-so-distant past, the competition to buy a home was so intense that buyers faced fierce bidding wars and often conceded one of the most important steps in the process, getting a home inspection.
Now, with higher interest rates and a much more "normal" market environment, inspections are back in a big way. So, what do they include? What do you need to know and what should you expect from the report? Let's take a look.
A true pro will thoroughly inspect a home from top to bottom. Depending on the home's square footage, it could take 2-4 hours to check everything out. As a buyer, you'll want to be there during the inspection so you can ask questions (they won’t mind) and get to know your new home.
According to the American Society of Home Inspectors (ASHI), the home inspector will visually assess:
- Foundation
- Walls, Floors & Ceilings
- Roof System
- Fireplace & Chimney
- Plumbing
- Electrical
- HVAC System
- Windows & Doors
- Exterior Siding & Paint
- Driveway & Walkway
- Deck or Patio
- Stairs & Railings
- Crawl Space
- Attic
- Basement
- Ventilation & Insulation
There are limitations, however. Inspectors may not move heavy furniture, climb a steep roof covered in snow, or shimmy into a dangerously tight crawl space. Sellers can help out by providing keys to areas that an inspector might need to access. Clear a path to and tidy up around your furnace and water heater. Reconnect utilities if you’ve moved out and had them shut off. The easier it is, the more thorough the inspection.
The report itself may be quite lengthy but not all findings are going to be major. An inspector may recommend tightening loose door knobs or cleaning out the gutters. This shouldn't hold up your transaction. The red flags are going to be items such as signs of water damage, foundation problems, wiring or electrical issues, roof defects, visible mold or termite damage, and HVAC appliance troubles.
Within today's more balanced market, significant issues can be negotiated, whether the seller lowers the home price or agrees to address needed repairs prior to closing. So, talk to your real estate agent. They will handle it all and advocate on your behalf.
