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Even though Denver’s real estate market is cooling relative to last year, it’s still hot. That’s the message Jill Schafer, chair of the market trends committee of the Denver Metro Association of Realtors, had to share about DMAR’s latest prognosis on the Denver metro area’s real estate market.
DMAR last week released a report examining home sales data from 11 counties that encompass Denver, Boulder, and their suburbs. Year-over-year, the report found the number of homes sold in February decreased 10.9 percent and the median price of homes also decreased slightly, down 1.2 percent year-over-year. The Denver Post noted this was the first February-over-February drop in seven years, but Schafer says buyers and sellers shouldn’t put any stock in that observation.
“The first six months of last year were just kind of an anomaly,” Schafer says. “We were crazy busy.”
Schafer says high-demand neighborhoods like RiNo, Sloan’s Lake, and Highland are as competitive as ever. The market is cooling (relatively speaking) in the suburbs, but even that doesn’t mean much. In Denver’s highly competitive real estate market (the most competitive in the nation, according to Forbes), the market can stand to cool a little and still be quite hot. Sellers have an advantage across the non-luxury market (that means—if you have the money—it’s easier to buy single-family homes selling above $1 million or condos at $750,000).
Overall, homes priced for the rest of us are now selling at a median of 39 days on the market. That’s up 21 percent from this time last year. This means buyers are gaining a little ground, but they’re still far from having the upper hand in this real estate market. Schafer says when homes are selling quickly (less than five months on the market), sellers have the advantage—they can hold out for a better price. Anything longer than six months on the market, she says, shifts the market advantage to buyers. Prices fall and buyers have more leverage to negotiate.
“We’re still in a strong sellers market,” Schafer says. “And, I don’t think it’s really slowing down in the suburbs. It’s just a little slower.”
Housing inventory on the Front Range is increasing relative to demand, contributing to the slowing market. DMAR’s March report found single-family home inventory increased 36 percent over last year and condo inventory increased 79 percent over last year. Nationwide, the report says Denver ranked sixth for the number of apartments added since last year (11,700).
But this isn’t driving down the average price—that’s increased (less than one percent) across single-family and attached units.
So, if average price is your thermometer, Denver’s not cooling at all.
Advice from a Real Estate Agent
Schafer shares her advice for buyers and sellers in the Denver-metro market.
Moving on up
“If you’re looking at moving up in price range, now is a great time to sell and move up to a higher price-point, because you’ll have a little more [buying] power there, and your [non-luxury] house will sell at its peak.”
Moving in (for the first time)
“If you’re looking to get into the market for the first time, you’re probably going to be further out from the city, and you may want to look at some new construction. Some of the big builders have move-in-ready properties, and there’s not as much stress for first-time homebuyers if they can find something in their price point, because they don’t [always] do competing offers on new construction.”
“It’s a little tougher if [homeowners] want to go down in price.” That is, if you want to sell your home and move into something more affordable to save money or downsize. There’s scant inventory of nice, smaller houses priced below luxury levels (that’s where sellers are retaining their advantage), so good luck finding a moderately priced third-act abode.
If you can pay to play, Denver’s real estate game is excellent. “Sellers don’t have to have their home on the market forever. Prices are still strong. Interest rates are incredibly low and they’re probably going to stay there—so to me, it’s the perfect time for people to be buying and selling.”