June 2022 demonstrated how sellers and buyers continue to adjust to the economic factors at hand.
As month-end active inventory continues to increase, the Denver Metro hit a new record for the average price of attached properties at $504,193 and $810,415 in detached properties. At the end of June 2021, Denver Metro ended with 3,122 properties, 2,137 detached homes and 985 attached on the market. DMAR reported it has now almost doubled that amount over the year, with a total of 6,057 properties, 4,684 detached homes and 1,373 attached, currently sitting on the market.
Buyers are feeling the woes of the economy.
Many first-time homebuyers who were initially pre-approved towards the beginning of the year with a specific interest rate decided to wait to buy until it wasn’t as competitive. But, when they restarted their search in May, they found that it was with an increased interest rate.
A summertime increase in inventory is part of the normal seasonality of the real estate market.
However, with the 65.85 percent increase in inventory compared to the previous month, Denver Metro should expect more balance as prices appear to be stabilizing. This was reflected in months-of-inventory, which is now at 1.19, the first time it has been above one in months since June 2020, but well below the 4-6 months-of-inventory of a truly balanced market.
The Luxury Market homes also saw an adjustment as the Denver Metro hit the midway 2022 point.
While all other pricing segments saw double-digit increases in new listings, there were more new listings in June for the Luxury Market but only a 6.82 percent increase. The impact on the shifting market can be seen most clearly by looking at the pending sales numbers. The number of pending sales of detached homes dropped 21.87 percent month-over-month.
Attached home pending sales were down 42.86 percent from May but closed sales increased 11.11 percent month over month.
While some prices are adjusting, the overall demand is still historically low, resulting in a more gradual change. The amount buyers paid over the listing price for detached homes also dropped from 107.11 percent in May to 103.85 percent in June and from 104.39 percent in May to 102.65 percent for the attached Luxury Market. Altogether, the amount buyers paid over the listing price dropped from 106.85 percent in May to 103.71 percent in June. That means, on average, they still paid above the list price and more per square foot. The attached home has the highest above asking price of all of the market segments.
*Updated as of July 13, 2022