Homes are taking longer to sell and fewer homes hit the market in August, with 5,170 new homes coming to the market (down from 6,118 in August 2021). Fewer buyers are locking down homes with only 4,836 homes going under contract, down from 6,033 in August 2021.

Home appreciation is also slowing down from its rigorous pace a year ago. Last month, the average home price went up by 6.78 percent compared to 14.23 percent in August of last year.

Homes Likely to Sell at Asking Price

According to the Denver Metro Association of Realtors(DMAR), the close-price-to-list-price ratio (sales price of a home divided by the last list price) was down to 99.41 percent. This means that most buyers are paying almost exactly the asking price.

Homes Taking Longer to Sell

In August 2021, homes were taking an average of 11 days to sell, and this year that number jumped to 19.

The number of under-contract homes, as well as sold homes, were both down. Only 4,221 homes sold in August 2022 compared to 6,048 last year.

Overall Picture

What we are seeing was anticipated due to historical seasonality and a slowdown in demand caused by rising interest rates. We typically see a cooldown in activity as well as month-over-month prices during this time of year in Denver. We expect activity to pick back up in the spring, meaning now is a great time to get into the market if you want to take advantage of a slower pace.

We saw inflation dip slightly in July, an optimistic sign for the overall economy. And owning real estate is not only a great hedge against inflation, but in contrast to renting, it allows you to actually budget for a steady monthly payment. With more active inventory, the insanity of the market has calmed down to a much more manageable pace.

Top Tips for Denver Metro Home Buyers:

• If you are looking for a “deal,” search for homes with price reductions and/or that have been on the market longer than the average (19 days).
• Get quotes from multiple lenders on rates since your monthly payment will significantly change based on your locked-in rate.

Top Tips for Denver Metro Home Sellers:

• Prices dipped month-over-month by 4.53 percent. We will likely see prices continue to drop as we head into the cooler months.
• Home sales are expected to decrease in the coming months as the market continues to cool seasonally.
• Establish a selling timeline for your home and be ready to make price reductions as needed to make that timeline work. If your home takes three weeks to sell, what does that mean for your moving plan?

Renting vs. Buying:

• Rental prices are on the rise. Denver rental prices increased by 20 percent since June 2019. The median 2-bedroom rental is currently going for $2,340.
• According to Keeping Current Matters, “The equity you build as a homeowner gives your net worth a big boost. And with high inflation right now, the link between owning your home and building your wealth is especially important.”
• “Year-to-date, Denver Metro is up 8.49 percent in median sales price. That translates to the average homeowner gaining $49,233.51 in equity,” (DMAR).

Key Quotes from the Denver Metro Association of Realtors:

• “While some individuals will take this as a sign that the real estate market is about to crash, Denver Metro has seasonality in its market and this is an example of that.”
• “Interest rates are still the biggest factor in their impact on buyer demand as it is a direct correlation to monthly payments. As the Fed continues to fight inflation, interest rates will continue to be a conversation topic.”
• “Year-to-date, the Denver Metro is up 8.49 percent in median sales price. That translates to the average homeowner gaining $49,233.51 in equity.”

August’s Numbers Over the Years:

Source: DMAR

Read Denver Metro Association of Realtors’ full report on last month’s Real Estate trends and statistics in Denver here.