The Denver Real Estate Market in September 2023
Last month, real estate in Denver followed the pattern of typical seasonal slowing. While there was a bump in activity after Labor Day weekend, the number of pending and closed homes decreased month-over-month while active listings (homes still available for sale) increased by 9.4%.
Taking a look at detached, single-family homes, here's the breakdown.
There were 7.8% fewer new listings in September compared to the prior month and 15.8% fewer listings compared to the same month in 2022. Typically, low inventory leads to increased buyer competition and a jump in prices.
However, the number of homes that went pending decreased by less than 10 percent month-over-month and year-over-year. In addition, closed sales were down 19.2% compared to August and a whopping 28.2% compared to the prior year.
As for the median home price, it increased ever so slightly year-over-year (by 1.6%) but decreased from $649,935 in August to $640,000 in September. Without high demand, low inventory is not having the typical effect on the Denver market. Many buyers are waiting on the sidelines and hoping for the interest rates to come down.
The problem with that strategy is that once rates do come down, there won't be enough inventory to go around. And what does that mean? Home prices take off.
So, what can buyers do in the meantime? First, understand that prices aren't the only thing you can negotiate with sellers. According to Libby Levinson-Katzs, Chair of the DMAR Market Trends Committee, the one group that seems to have the right strategy for today's market is first-time buyers.
"They aren't tied to historically low interest rates and feel the freedom to move as the current interest rates are all they know. Additionally, they understand the purchasing a home is a faster way to build wealth and gain equity as opposed to paying their landlord's mortgage. They are keenly aware that properties are sitting on the market longer, and sellers are often making multiple price reductions, providing first-time homebuyers with the leverage to ask for concessions."
So, what are seller concessions? These are costs that the seller may agree to pay to incentivize buyers. These can be contributions to specific closing costs, or simply a percentage of the total. As a buyer, you can ask a seller to pay for:
- Discount/mortgage points to reduce your interest rate
- Inspection fees and even repairs
- Appraisal fees
- Loan origination fees
- Property taxes
- Title insurance
- Recording fees
Your real estate can explain each of these in more depth, but seller concessions can ultimately reduce your upfront, out-of-pocket costs and even your monthly mortgage. Once interest rates come down, the ongoing lack of inventory will likely take these options off the table.
Bottom line—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 assist you with a smart pricing strategy and fair negotiations if concessions are requested.
What Goes Into Pricing Your Home Just Right
If you're thinking about selling, the first step is to adjust your expectations for today's market. You likely won't sell your home in three days and for the price that your neighbor sold for in 2021. However, if you've been in your home for a number of years, you're still sitting on a ton of equity.
The key is developing a smart home pricing strategy. This is both an art and a science. You need to look at comparable sales, current market conditions, your neighborhood vibe and other various nuances. If your home is priced too high, buyers could be turned off right out of the gate.
And once a home lingers on the market, buyers will wonder why it’s been on the market so long and might even assume there’s something wrong with it. It can be tough to reverse negative perceptions.
Here's a closer look at the most important factors that your agent will take into consideration when pricing your home.
1. Comparative Market Analysis (CMA)
Your agent will use a CMA to look at how sales are trending in your area, including current and past sales going back around three to six months. They’ll look at comparables (comps) with features similar to your home such as the number of bedrooms and baths, square footage, lot size, location, age of the home, and of course, the final selling price.
While finding comps exactly like yours may not be possible, your agent will be able to provide you with an initial price range. Together, you can then talk about other factors that will allow your agent to zero in on the best possible price to attract the most potential buyers when your home goes on the market.
2. What Sets Your Neighborhood Apart
A buyer can typically change things they don’t like about a house—knock down a wall or put up some shiplap—but they can’t move it to a different location. So, work with your PorchLight agent to list out everything that gives your neighborhood an advantage. Are you close to light rail, entertainment, parks and trails, freeways, even a Trader Joe’s? What are the schools like and are they within walking distance from your home? Is your neighborhood up and coming with new restaurants opening and amenities being offered? Are there great views?
3. Updates, Upgrades, Age & Condition
When touring your home, potential buyers will likely appreciate shiny new kitchen cabinets and updated bathrooms. However, a savvy home hunter might investigate the age of your water heater and ask about your roof, especially since we have such intense hail storms here. And as soon as a buyer discovers one issue, they may begin to wonder what else might be wrong with the home.
If you want to spruce things up before selling, you can discuss your options with your PorchLight agent. As market and neighborhood experts, they will guide you through what changes or updates are worth addressing. They may suggest a new furnace and painting your cabinets instead of doing a full kitchen overhaul. It might also just be best to fix simple things and catch up on basic home maintenance. So, be sure to talk it out.
Final Tip: Detach from Emotional Attachments
Once it’s time to sell, the best thing to do is to try and approach things from the perspective of a buyer. Your agent, and perhaps a PorchLight staging expert, may recommend anything from decluttering and cleaning to maintenance fixes and rearranging your furniture. While this isn’t a reflection of you or your personal style, their advice will ensure that the look of your home aligns with the asking price. If usable square footage can be visually maximized by taking out bulky furniture, or potential buyers see the home as move-in ready, a faster sale will make the process worth it.