When it comes to buying and selling real estate, visualizing data can be incredibly powerful. That’s why I always lead with the latest market insights when talking to my clients. According to recent data from Megan Aller’s July Denver Metro Market Review and a compelling article from Westword, there’s never been a better time for home buyers to step into the Denver housing market. The shift towards a buyer’s market is creating golden opportunities, with favorable conditions making it easier than ever to find your dream home. Let’s explore why this moment is perfect for making that pivotal move.
Factor #1: Inventory
The inventory stats are by far the most compelling: with over 10,000 active units for sale (up 68.3% from July) we have not seen this much inventory since 2013. While this much inventory certainly makes it a challenging time for those trying to sell their homes, it is good news for buyers. Basic economic principles tell us that when supply is up and demand is down, pricing will stabilize, and those are the trends we are seeing through the sheer amount of opportunity for seller concessions. The caveat is that some areas are more competitive than others due to microeconomics that are always at play. So depending on what zip code you are shopping in, it can vary greatly. Further leaning into why it’s always intelligent to consult your realtor.
An increase in inventory also highlights the average amount of showings to contract per property has increased 15% (and average days on market up 63%), meaning buyers have more time to make informed decisions.
Source: Megan Aller July 2024 Weekly Report
Coupling that with this chart (below) showing the odds of selling being down more than 15% from this time last year at 40.2%, gives you a well rounded picture of just how much inventory is out there.
Source: Megan Aller July 2024 Weekly Report
When we looked at seven metro counties, we found that homes priced between $500,000 and $1 million make up 60.2% of sales. Now, check out the chart below. It shows that a staggering 46% of listings had price reductions, and 58% of all price points had concessions offered. This means buyers have a lot of negotiating power right now!
Source: Megan Aller July 2024 Weekly Report
This percentage can be much higher or lower depending on what zip code you are shopping in. For example, areas in blue and green have lower odds of selling (therefore higher odds for concessions), whereas red zones are much more competitive. Strategy is necessary, especially when considering the varying factors from neighboring areas. One size does not fit all, especially when it comes to the market right now.
Source: Megan Aller June 2024 Monthly Detached Single Family Report
What’s Happening with Interest Rates?
It’s true that interest rates recently dipped below 7% for the first time in a while, but the good news is that doesn’t necessarily mean the market will flood with buyers…yet. Because of this expected turn of events, those who want to get ahead of the chaos are wasting no time and are taking the jump now.
Current rates have kept a lot of buyers waiting in the wings, which has lead to less competition for those willing to sacrifice an average of $300-$400/month in interest for the average priced home. We’re in a small window of opportunity where buyers aren’t competing with 50 other offers, and having to put $20k down over asking. That is, until interest rates start to creep down more, which we could start to see as early as October.
Concern around the Election?
Every four years, elections seem to bring things to a standstill, and yet every four years, data tells us the same thing: elections don’t change much in the housing market. Here’s what data tells us about the housing market regarding election cycles:
Source: NAR, National Association of Realtors
You’ll notice the only time housing prices didn’t go up after an election year was during the ’08-’09 housing crisis, which is to be expected given the unprecedented circumstances.
So, let’s say interest rates drop even more but housing prices continue to climb as forecasted, resulting in the market flooding with even more buyers. What will the market look like then?
A lot of real estate agents live by the mantra ‘the time to buy is yesterday,’ yet I don’t necessarily agree. I say, the time to buy is always when you are ready to. That being said, data doesn’t lie and if you live in Denver metro area, the time to buy is the second you’re ready. Are you waiting for your gut to go from “ready” to screaming “NOW”? Let me start with some affirmation: The market is hot and primed for first time home buyers to enter the market. A conversation is not a commitment, but all commitments have to start with a conversation. Let’s chat about your scenario and I’ll let you know how I can help.
