The Denver Real Estate Market in October 2023
Along with typical seasonal slowing, the Denver real estate market might appear a bit sluggish due to fewer sales. However, homes historically appreciate by 3-5% year-over-year, and detached, single-family homes in Denver came in at a median price of $649,000 for October, or 3.84% higher than in 2022.
So, things are actually pretty normal—if not very different from the unprecedented pandemic conditions when the Freddie Mac House Price Index showed prices skyrocketing by 11.6% in 2020 and 18% in 2021.
The segment most affected by seasonal slowing and market normalization is home sellers while buyers are still grappling with high interest rates.
These ongoing challenges are reflected in the October data for detached, single-family homes. New listings coming on the market decreased by 17.4% compared to September and 3.6% compared to the same period last year.
And while pending sales increased month-over-month and year-over-year (an unusual bump in activity), closed sales are down 15.3% year-over-year and 12.1% compared to September. Days on the market also remained in the double digits as buyers took their time to find the right home, the right deal, and motivated sellers.
Even with this slowdown, active listings still on the market at the end of the month decreased by 2.7% compared to September and 2.8% compared to 2022. While rising inventory has been pushing the market in favor of buyers for months now, this could maybe, possibly be a turning point.
Finally, as stated above, the median price increased slightly compared to September and provided solid year-over-year equity for homeowners. But, the close-price-to-list-price ratio was 98.8% which isn't bad but goes to show there's room for buyers to negotiate and help offset today's higher interest rates.
Along with price negotiations, seller concessions are on the rise. To incentivize buyers, these are costs that the seller may agree to pay such as a rate buy down, inspection fees and repairs, appraisal fees and more. In October, 57.9% of closed transactions included an average seller concession of $9,390. A year ago, 50.7% of transactions included concessions averaging $7,553.
It goes to show that this is a powerful tool for both buyers and sellers to negotiate, making it important to have an experienced agent to advocate for you, no matter what side of the table you're on.
Moving forward, Denver home sellers need to continue adjusting to the current conditions. Here's what Libby Levinson-Katzs, Chair of the DMAR Market Trends Committee, advises if you are thinking about putting your home on the market:
"Ultimately, sellers need to get the pandemic out of their minds. That time frame was a perfect storm of low interest rates, unprecedented demand while residents fell out of love with their homes working from home, and the ability to literally work anywhere was a novel idea. As employees are called back to the office and interest rates hover around eight percent, the party is over. Sellers need to focus on value and put themselves in the buyer's shoes. Buyers are no longer willing to overpay and, as such, pricing is the number one key in this market to sell a home."
The bottom line? As a seller, you need a seasoned professional to assist you with a smart pricing strategy and fair negotiations if concessions are requested. If you're a buyer, now is the time to not only shop around but push for a deal that works with your budget and makes today's higher interest rates more of a non-factor. Ultimately, you will not only achieve your goal of being a homeowner but gain valuable equity over time.
Selling Your Home in the Winter
Nothing puts a home to the test like a cold, Colorado winter. If you're thinking about selling, keep in mind that moisture and low temperatures can reveal a lot about the upkeep of your home—or lack thereof.
Before you go on the market, it's wise to winterize so that buyers aren't turned off by any issues that might arise when they tour the home or bring out an inspector. Here are some items for you to attend to if you haven't already.
- Clear gutters and downspouts then double-check them if you see leaves fall into them.
- Hire a roofing pro to inspect for loose/missing shingles or flashing and fix any damage.
- Have a lawn care expert blow out sprinkler lines and shut off the system for the season.
- Disconnect all hoses from your outside faucets and install an insulated hose bib cover.
- Close any crawl spaces and other exterior vents that might be left open for the summer.
- Trim weak or dead tree branches that could break and fall on the roof, a car or fence.
- Cover up or store outdoor furniture, grills and hoses in your garage, basement or shed.
- Apply a fresh coat of sealer to any decking to prevent damage from snow build-up and rain.
- To prevent fires and any hazards, have your chimney cleaned, inspected and repaired.
- Buy a snow shovel, salt or sand and other winter supplies and keep walkways clear.
- Have an HVAC professional service the furnace, checking the blower, motor, piping, etc.
- Replace your furnace filter and continue doing so every 4-6 weeks throughout the winter.
- Seal drafts (with caulk/weatherstripping) around doors, windows, lights and switchplates.
- Clean out your window tracks, removing dirt or debris that may prevent proper sealing.
- Test the fireplace flue, confirming it operates properly and forms a tight, closed seal.
- Insulate your water heater along with exposed pipes in areas like a crawlspace or attic.
- Check all smoke and carbon monoxide detectors and replace the batteries if needed.
- Move furniture and other items away from heating vents to ensure efficient airflow.
- Set ceiling fans to turn clockwise, pushing hot air from the ceiling down to the floor.
- Install a smart or programmable thermostat to control temps when you’re not at home.
You can also talk to your agent about getting a preinspection of items like your roof. A recent snowfall could make it impossible for a buyer's inspector to examine the structure which could potentially put the deal on pause. Being able to show a certified roof, or receipts for furnace and fireplace servicing/repair can go a long way to put buyers at ease.