The Summer Slowdown Drives Up Inventory
Between the July 4th holiday and the start of summer vacation season, Denver's real estate market continued to slow last month. New listings, pending sales, and closings decreased month-over-month while days on market increased. And total active inventory skyrocketed by 68.03% year-over-year. Let's take a closer look.
In the single-family, detached segment, there were only 3,730 new listings in July. While up by 10.42% compared to the prior year, this figure has been coming down steadily over the last few months. For comparison, there were 4,294 new listings in June and 5,165 in May. All typical for this time of year.
Despite new listings slowing and pending sales remaining steady—up by less than 1% month-over-month and 1.54% higher year-over-year—there were 7,370 homes still available for sale at the end of the month. That's a 2.66% increase compared to June and a significant, 60.32% jump year-over-year.
In addition, the market pace also continued to slow. It's now taking an average of 28 days to sell a home, up from 26 in June and an increase of 27.27% compared to 2023.
All of this likely reflects today's higher mortgage rates and buyers either taking a summer break or waiting on the sidelines due to speculation that rates might come down later in the year.
As a result, the median price for detached properties in the Denver metro remained absolutely flat month-over-month, coming in at $660,000. That's also a meager increase of just 1.54% compared to the same time period last year. Typically, healthy annual equity gains are in the 3-4% range.
Sellers also received 99.06% of their asking price in July. While this is a strong number, taking just 1% off the asking price of $660,000 equals $6,600 right off the top. So, buyers who are remaining on the hunt this summer are finding sensible deals out there, which is helping to offset mortgages that can be refinanced when rates do, in fact, ease.
As for attached properties, such as condos and townhomes, the numbers were similar. New listings were down by 7.18% month-over-month and up by less than a percentage point year-over-year. Here, both pending and closed sales were down by double digits compared to 2023.
The outcome here was 3,214 active listings at the close of July, an increase of 5.90% compared to June and an incredible increase of 88.84% compared to the prior year. That's a lot of inventory!
The median price in this segment came in at $415,000 which is a slight increase over the prior month, yet 1.19% below the prior year. And sellers are closing for 98.99% of their listing price. It's also now taking an average of 35 days to sell, up 6.06% versus June and by 40% YoY.
Again, there are potential bargains to be found here, but keep in mind that many condo/townhome HOAs are increasing monthly fees due to rising costs for insurance, upkeep and repairs. It's important to understand the pros and cons and work with a real estate agent to look into an HOA's finances before moving forward.
All things considered, including the potential of rates coming down later in the year, here's what both buyers and sellers need to know according to Libby Levinson-Katz, Chair of the DMAR Market Trends Committee:
"The market (as a whole) experienced a slowdown with an 11.58 decrease in new listings month over month, although new listings were up 7.58 percent year over year. That means that fewer sellers listed their homes in July, while the larger trend continues to showcase that not all homeowners are married to their historically low interest rates. Instead, they may be some of the savviest consumers, understanding that a potential rate cut this fall could increase buyer demand. This increased competition may take us back to a landscape where home prices rise as multiple buyers bid on the same homes. Buying now allows for a thoughtful search with room for negotiation and refinance down the road."
Basically, buyers waiting for rates to come down is a strategy that could possibly backfire if a sudden rush to buy wipes out the current backstock of home inventory. This could cause more competition and higher prices. Whereas right now, buyers can take their time to find a great deal and even work out better terms.
Want to talk strategy further? An experienced real estate agent can better assess the market and provide a smart approach, as well as negotiate and advocate on your behalf. A proven professional will have the expertise, connections and resources to help you achieve your real estate goals. Choose your agent wisely.
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