In a real estate market characterized by shifting dynamics and ongoing uncertainty, the Denver Metro area has remained resilient in the face of these challenges. This October, one notable observation in the Denver Metro area is that inventory, which typically decreases towards the end of the year, has exceeded expectations by surpassing year-over-year numbers. This anomaly indicates unique opportunities in the market. New listings declined by nearly 17 percent month-over-month, but year-over-year, they only dropped by 0.65 percent. Active listings at month-end increased by 2.63 percent compared to the previous year. Additionally, pending sales have risen by 1.76 percent year-over-year, demonstrating the market’s vitality.
We should consider the importance of historical data when looking at the data this fall. In 2023, the market closely resembled pre-pandemic levels from 2019, with a sales volume exceeding $24 million and a median days in the MLS at 11, just one day short of the median in 2019. The close-price-to-list-price ratios remained over 99 percent, while pandemic years saw figures above 103 percent. This data suggests that sellers need to focus on value and pricing to be successful in the current market.
Buyers find themselves in a unique position, with overall mortgage applications at low levels. The rise of hard money loans and gifted funds helps bridge the gap toward homeownership. December, historically a quieter time for Denver area real estate transactions, now offers more choices for buyers due to increased inventory. Buyers who remain active during the holiday season face less competition, making it an advantageous time to find motivated sellers.
In the $1 million and above market segment, the peak of inventory has passed as the market transitions to winter. The number of new listings is down 16 percent compared to the previous month, consistent with seasonal norms. There are also fewer incentives from sellers to buyers. The balance of supply and demand helps maintain relatively stable prices, with the average price of a sale in this segment standing at $1,660,783.68.
Despite the decrease in new listings and closed sales, high-value properties continue to sell. The highest selling detached home in the Denver Metro recently sold for $14,705,000 in Golden, while the highest selling attached property in the area sold for $3,000,000 in Greenwood Village. This demonstrates that appropriately priced and turn-key properties can still attract quick sales and potentially sell above asking price.
Nonetheless, average days on the market (DOM) increased to 40 days for detached properties and 44 for attached properties. The close-price-to-list price ratios have declined to 98 percent of list price, indicating that many sellers are receiving below their asking price. The $1 to $1.5 million detached market is still a seller’s market with 3.12 months of inventory, below the inventory level needed for a balanced market. Above $2 million in the detached market is a buyer’s market, while the $1 to $1.5 million attached market falls into a neutral category with 4.56 months of inventory. The above $1.5 million attached market is also a buyer’s market. Given the incredible nuance in price ranges and areas, it’s important to seek granular detail from your real estate broker.
Concessions, no matter what market one is in, seem to be the name of the game. Buyers can use concessions to decrease their interest rate or put funds toward closing costs or pre-paids. Creativity and professional guidance remain crucial in the evolving real estate landscape, and as supply and demand decrease towards year end, innovative deal structuring can make a significant difference in how buyers and sellers experience the holiday season.
The Denver Metro real estate market report for November paints a picture of opportunity and market dynamics. While the general market continues to show strong year-over-year performance, the Luxury Market is experiencing unique shifts in inventory and pricing. As the year draws to a close, the key takeaway for both buyers and sellers is the importance of adapting to the evolving market conditions and embracing creativity where one can.
*Updated as of November 6, 2023