Denver Real Estate Market Report for September 2019

See below for our full report for September 2019 and please let us know if you have any questions. We email this market infographic report on the Denver Real Estate Market each month. To get on the email list, please reach out to marketing@usajrealtystg.wpenginepowered.com and request to be added.

Update on the Denver Housing Market

The price of homeownership in Denver increased yet again in September 2019 year-over-year but dipped just slightly when comparing the numbers to August. The average sold price for a home in metro Denver for September was $483,734, a 6.06 percent jump from September 2018 and a .56 percent decrease from August.

If realtors have noticed a shift in the Denver market, it may be related to the fact that demand is not as strong as it was last year, in spite of rock-bottom interest rates and increasing rent prices (DMAR reported that rent prices have gone up 74% in the last decade). The number of homes sold in September, both attached and detached homes, dropped 2.22 percent when compared to 2018, according to the report. Affordability affects demand as well. There were only 3,472 homes for sale priced between $300,000 and $499,999 in August and 3,404 in September.

Inventory went up 5.44 percent from September 2018 to 2019, and the number of days on market increased to 33, a 22.22 percent increase from September of last year.

Homebuyers are now able to afford more now than in years past. Why, you ask? Interest rates are incredibly low and will continue to be so for the foreseeable future. Wages in Denver are finally ticking up, we are experiencing relatively low inflation, and appreciation has slowed so buying may make sense now more than ever.

With low rates, higher wages, low inflation and low appreciation, in theory, a buyer can afford more house. For example, every time rates decrease by 0.25 percent, you can afford about 2.5 percent more home. Your ability to borrow $360,000 at 5 percent becomes an ability to borrow $400,000 at 4 percent. If home prices go up and interest rates increase, you might be able to buy substantially less house in five years than you can today, especially if your income doesn’t increase.

Your ability to borrow $360,000 at 5 percent becomes an ability to borrow $400,000 at 4 percent.

If and when a recession does rock the financial sectors, housing prices may not necessarily go down. According to Curbed “only twice in the last five recessions—in 1990 and 2008—did home prices come down. In 1990, prices decreased by less than a percent. During the other three, prices actually went up.”

Speaking with a qualified lender will help you determine if now is a good time for you based on things like your monthly income, down payment, credit history and what kind of monthly mortgage payment is suitable for your lifestyle.

Read next: Rent vs Buy? More Millennials are Buying Denver Homes

If you are weighing the pros and cons of buying or selling this year, a Usaj Realty broker would be happy to assist you in expertly navigating the Denver market. Many factors go into deciding what could be right for your particular situation, so sitting down with an expert can be a great opportunity to discover the best route for you.

How Sellers Can Adapt to the Shifting Market

While we are still technically in a sellers market, especially for homes priced under half a million dollars, it is still wise to adapt to the changing market if you are going to sell. DMAR reports that, “The number of price reductions has gone up. The spread between the list price and the sold price has widened. And the average days on market went up.” 37 percent of homes that sold saw a price reduction before going under contract last month. With the environment and expectations shifting in this direction, it can be a smart time to get creative with the sale of your home. Your Usaj Realty broker will walk you through this more in-depth, but if you are thinking of selling, and want to do it quickly, it can be helpful to:

• Be willing to negotiate on price
• Consider the buyers’ terms and conditions and be flexible with dates and deadlines
• Be open to a rent-back scenario if possible
• Getting a pre-inspection or be willing to work with the buyer on inspection items
• Get as much early interest as possible with a “coming soon” campaign (this means being flexible with the list date and allowing your realtor a couple weeks to get the word out prior to listing the home)
• Be sure to counter offers, even if they seem initially unreasonable. You may just be able to find a compromise
• Invest in staging and other home improvements that will attract and retain buyers
• Consider accepting a contingent offer
• Pay seller concessions
• Or, if you cannot afford any of these up-front costs, then simply price the home appropriately when you list it, knowing the new buyers are going to have to spend that time and money fixing the home

Overall just trying to remain open-minded, get creative with your realtor, choose trustworthy vendors and stay nimble.