The Denver Metro market continued to normalize in October.
Active inventory declined slightly to 7,290 homes on the market at month’s end. However, this is an increase of 115.94 percent year-over-year. While this number reads as a jump, the current inventory is still less than the pre-pandemic inventory numbers of 8,557 active listings in October 2019.
Rising inflation and interest rates are changing the landscape of the market, showcased in new listings. New listings coming on the market declined 26.73 percent from last month and 27.92 year-over-year. As a result, Denver Metro saw its first small decline in average and median sales prices last month. However, sale prices skyrocketed over the last two years so as a result, the market is well ahead of historical appreciation metrics of where the Denver market would likely have been in fall 2022 had it not experienced a pandemic-fueled buying frenzy.
The Luxury Market saw the number of new listings and closings decrease dramatically, and the close-price-to-list-price ratio increase from the previous month.
Throughout the month of October, listings decreased by 28.69 percent compared to the previous month. There has always been seasonality in the market and a decrease in active listings is consistent with the past. The value of houses is about the relationship between supply and demand. While supply did drop dramatically, the amount of closed properties decreased by 31.52 percent compared to September.
The market shift changed the dynamic between sellers and buyers.
Months of inventory for single-family detached properties is 3.43 and for attached properties is 3.08. The Luxury Market has the highest months of inventory of any price point. This change shows that the demand for this type of property has proportionally decreased more than the supply has. The increased months of inventory translated to buyers having more negotiating power with appraisal and inspection clauses back in contracts.
As the Denver market normalizes, we are grateful that there remain many opportunities to look at the silvering lining of the industry. The evolving marketplace allows buyers, particularly luxury buyers, the gift of time to decide on a home while negotiating terms that suit their needs and dreams. Meanwhile, sellers have more time to analyze the marketplace to position their homes correctly while being able to experience a great return on investment due to rising prices over the last few years.
As of late, we’ve noted that 2022 is constantly compared to 2021, which was anything but normal, and year-over-year comparisons are painting a deeply negative picture which causes confusion in the current market and what next steps to take. Below, we are focusing on dissecting some of the whispered misconceptions that we have been hearing of from our buyers, sellers, and other industry professionals in hopes that it helps potential buyers and sellers, particularly in the Luxury Market, make more informed decisions as we head into 2023.
Overall in the market, active inventory did slightly decline to 7,290 homes on the market at month-end, but this doesn’t mean what you think it might.
The misconception here being that many are not acknowledging how this relates to the pandemic’s affect on housing. While this is a staggering jump, and increasing inventory continues to make news, we would like to point out that the current inventory is still less than the pre-pandemic inventory of 8,557 active listings in October 2019. As our market readjusts, both in luxury and overall, we have to bring into consideration that the last two years of COVID-19 have been more of the exception, and not the rule.
Our CEO, Gretchen Rosenberg, pinned an article on Kentwood’s website in August explaining: “Do you remember what the interest rates were in 2018? The average that year was 4.54%, but they got up to 5%. Not altogether that far off the rates today as I write this. Again, 2020 and 2021 were not usual or customary, they were a reaction to a once in a lifetime black swan event.”
If COVID-19 had not occurred, records from DMAR also conclude that the market trajectory is on pace with where it should’ve been back then.
The market is crashing and as a result, the Luxury Market saw a decline in closed properties and new listings this month, meaning buyers have all the power.
This statistic has some startled, however, our point of view is that there has always been seasonality in the market and a decrease in active listings is consistent with the past. The value of houses is about the relationship between supply and demand. While buyers may think they have negotiation power in this market right now, it’s a bit of a misconception because many sellers are hesitant to drop their price too much, which is why the close-price-to-list-price ratio in October was 98.72 percent. We suspect November will represent a similar flow as October.
When buyers say that they want to wait until the New Year to buy, this rarely means January 1st.
While this may not be a “current market” misconception, and more a “November and December misconception,” it’s worth noting that this time of year brings a slow down with the holidays that continues into early spring. When people state that they are going to “start looking” for a home, it usually really begins around the third week in January or later.
We continue to still see bidding wars in the Luxury Market.
While bidding wars are certainly not as common, there’s a misconception that they are obsolete and that is not the case. We have heard of buyers that had to compete on a million-dollar house that went above the asking price. Each listing will always dictate its own story. The key to receiving multiple offers in this market is to price conservatively.
“Houses are no longer selling themselves … but if you wait til spring you’ll be fine.”
On the flipside, homes are not selling themselves in quite the same manner but the misconception we’re starting to see is reflected in how few new listings there were last month in the Luxury Market. We stand by the recommendation that it’s still important to remember to invest in photography, staging, and open houses, plus have a price reduction strategy ahead of listing.
If you plan to wait to sell until spring, do not hold off on the updates.
On the contrary, plan ahead of time to do all the “little” updates necessary to sell your home quickly. Include replacing light bulbs, painting, servicing the HVAC, getting carpets cleaned, repairing screens and decluttering on their home maintenance project list. Other recommended fall home projects include:
● Paint the exterior of the home
● Aerate and overseed lawn
● Clean the gutters
● Winterize sprinklers
● Repair the roof, if needed
Whether you’re looking to buy or sell a home, reading past the headlines and hyperbole is key. Having an experienced Kentwood Real Estate Broker who knows what’s happening in the housing market can help you make an informed decision. Other team members who will be valuable as you go through the process: Prosperity Home Mortgage and HomeServices Insurance. Our partners who we trust to help you dissect the news and apply it to your life decisions.
As the Denver real estate market continues to change, the question on everyone’s mind is whether or not we are in a buyer’s market. Traditionally, a market with less than three months of inventory is considered a seller’s market. In direct relation to that, a market with more than six months of inventory is considered a buyer’s market, which means that three to six months of inventory is defined as a balanced market. These benchmarks help define the current Denver Metro market, which is changing.
The $1 million and over segment for attached homes is at 2.83 months of inventory. Using months of inventory as a metric indicates that Denver Metro is moving toward a balanced market and Luxury Market sellers are focused on getting their homes on the market, and it shows.
New luxury listings were up 18.86 percent from August, with a total of 649 homes priced over $1 million hitting the market in September. The attached Luxury Market saw a massive increase in new listings, up a notable 66.67 percent from the prior month. With 5,962 new listings hitting so far this year, the Luxury Market is enjoying the highest amount of inventory in years.
Luxury buyers also have more time to decide which luxury home to buy. Both detached and attached markets saw a significant increase in the average days in the MLS from August, up 31.82 percent or 29 days for detached, and 40 percent or 35 days for attached. This slowing market is echoed in the drop in pending sales in September, which decreased by 16.35 percent for detached homes and 8.33 percent for attached.
The spring frenzied bidding wars also seem to have subsided. The close-price-to-list-price ratio dropped below 100 percent again this month, to 98.21 percent for detached and 99.30 for attached. Although the detached Luxury Market enjoyed an annual appreciation from a price per square foot perspective of 9.41 percent and a flat month-over-month appreciation, the attached market suffered a decline in annual appreciation of 0.18 percent and an even bigger decline month-over-month, by 5.26 percent.
The Northern Colorado market continues to show a seasonal adjustment amidst economic factors. The data continues to confirm that the Northern Colorado area has shifted to a much-needed and more even playing field. Compared to last August, inventory continues to go up and the northern market continues to see price reductions.
Fort Collins detached homes sale volume decreased by 13.41 percent, keeping with the trend of the last few months. In comparison to 2021, the decrease went from $126,426,514 to $109,470,816 in September 2022. However, 161 detached homes were sold in September 2022 compared to 215 in 2021, a 25.12 percent decrease. Attached home sales were also significantly down from the previous year, from 88 in September 2021 to 54 this year, a 38.64 percent decrease overall with the sales volume decreasing 25.04 percent from $29,935,459 in 2021 to $22,439,395.
Berthoud, on the other hand, experienced a slight increase in their detached homes price total sales. At $21,062,909 in September 2022, versus $22,366,438 in September 2021, this was a 6.19 percent decrease. The average sales home price increased significantly as well, at 28.94, from $619,497 last year to $798,801. Attached homes, however, experienced a dramatic decrease in total sales volume from $2,250,000 in 2021 to $434,000 this month due to only one attached sale for the month.
Meanwhile, Timnath saw a substantial increase year-over-year in detached homes sold. Bucking a month-to-month trend, Timnath’s detached market went from 17 homes sold in September 2021 to 21 homes in September 2022, a 23.53 percent increase. In its attached market, Timnath also experienced a dramatic increase from 0 in 2021 to 8 in September 2022.
Boulder saw a massive increase in detached sales volume year-over-year while seeing a decrease in detached home sales. In the detached market, the total September sales volume went from $16,590,706 in September 2021 to $111,755,188 in September 2022, an increase of 573.60 percent. However, the attached market saw a decrease in sales again from 80 in September 2021 to 56 this month.
Loveland saw another decrease in detached average home sales. In Loveland’s detached market, residents saw 168 sales in September 2022 versus 125 in September 2021, a 25.60 percent increase, with the average sales price for a detached home increasing from $564,364 in 2021 to $596,663.
Figuring out how to price your home when preparing to sell puts many into a classically coined “Goldilocks” situation; you don’t want to set the price too high and scare off potential buyers, but you also don’t want to sell too low. In our shifting Luxury Market of today, it creates a quandary. Proper pricing can provide more exposure to buyers, expedite the home sale process and it prevents your house from sitting on the market for too long. Here are a few pricing strategies to consider when deciding how to price your home for this market.
Be Cautious of Overpricing Though it’s easier said than done, you want to avoid overpricing your home. We know that the past couple of years felt like anyone could price their home for nearly anything and expect a bidding war, but those days are slimming. Potential buyers may not see the listing if it is priced too high or they may ignore it altogether. In other words, buyers have some leverage again. Overpricing can also cause the property to sit on the market for too long and become “shopworn”, causing it to sell for less down the road. Since most of the activity around your home’s sale occurs within the first week or so, it’s vital for it to be properly priced and create that sense of urgency in the buyer’s mind.
Watch the Seasonal Market Shifts The season you decide to sell your home during can have an impact on your home’s sale. In Denver, homes sold in early March saw sales for $30,000 over the listing price. Monitor the home selling trends throughout the four seasons, as you may see buying patterns shift before your eyes. For example, you may see a surge in home sales during the end of autumn as people are eager to purchase and move in quickly before the first major snowfall.
Sale Price Doesn’t Always Mean List Price The price you list isn’t always the sale you get. Buyers will often make an offer that’s slightly lower than your asking price, and then it is up to you whether to accept, deny or begin negotiations. But it doesn’t stop there. Once the buyer has the house appraised and inspected, they may ask for a price reduction to cover any issues that were uncovered along the way. It’s important to set a price that takes these potential reductions into consideration, without also overstretching and setting the price too high.
Don’t Forget the Internet Thanks to the internet, we have access to tons of property data at our fingertips. You can find out when your home was built, the last sale price of your home, look at current real estate market trends and even get a free home value estimate. The free estimate may be a good starting point to work from if you are in the very early stages of selling. Though it may not become your exact listing price, it will provide you with a general idea of your home’s value and how you stack up to other houses sold in your area.
Shop Your Competition To ensure you are pricing your home in the appropriate range, observe how other properties similar to yours have sold recently. The houses should be around or very close to your own in terms of size, type, age and in the same location. While you can do some of this research yourself, our expert brokers at Kentwood can prepare this for you as well during the home selling process.
There are many different factors that play into pricing your home appropriately. If they are all taken into thoughtful consideration when determining the listing price your chances of a speedy and successful home sale will skyrocket. If you are ready to put your home on the market, contact one of our experienced Kentwood brokers today at Kentwood.com.
Give the gift of warmth this year by donating to HomeAid Colorado‘s Share the Warmth 2022 clothing drive.
As a proud partner of the local nonprofit, Kentwood Real Estate is hosting donation drives across Denver. At all four Kentwood offices, you can drop off socks, hats, gloves, and other winter items through October 28. Please call our office closest to you to schedule a donation drop off.
Kentwood Real Estate Cherry Creek 215 St. Paul Street #200 Denver, Colorado 80206 | (303) 331-1400
Kentwood Real Estate City Properties 1660 17th Street #100 Denver, CO 80202 | (303) 820-2489
Kentwood Real Estate DTC 4949 South Niagara Street #400 Denver, Colorado 80237 | (303) 773-3399
Kentwood Real Estate Northern Properties 2510 E Harmony Road #202 Fort Collins, Colorado 80528 | (970) 300-1985
Your donation could help thousands of homeless men, women, and children facing a winter without permanent housing in Colorado.
Kentwood Real Estate is a supporter of HomeAid Colorado, an organization devoted to building new lives for Colorado’s homeless through housing and community outreach. HomeAid works with local home builders, trade partners, real estate entities to supply essentials and build housing for people in need of a roof over their heads.
Luxury homes in Colorado provide class through features like modern architecture and gorgeous floorplans, though the real luxury of the properties comes from the beautiful locations. However, before you begin your search for a Colorado dream home, here are a few tips you should take into consideration.
Location. Location. Location. The variety of landscapes that Colorado offers provide an array of lifestyles when it comes to purchasing a luxury home, from properties with close proximity to shopping in the city, like Cherry Creek, to more secluded, mountain living in areas like Estes Park. Determine ahead of time what type of location you’re searching for and you are sure to find your perfect luxury home in whichever area you choose.
Timing is everything. Since 2021, the price of Colorado homes has increased 8.5 percent on average and continues to grow each year. Purchasing early can support a higher quality investment and a higher potential profit should you choose to sell the property someday. Right now, there still remains a very high demand for properties in Colorado. Ski town areas are running out of space for new homebuyers, fueling the price increase (Singer, 2022), and recently, there has been pushback from locals in ski towns calling for lease caps and loan programs due to the price surges (Sisson, 2019). Continue to monitor real estate news and announcements to determine the best time for you to buy.
Prepare. With any purchase of a home, it’s important to have all your ducks in a row and come prepared when meeting with your broker. Speaking with a mortgage lender ahead of time and getting pre-approved will expedite the homebuying process. Having a reputable home inspector on call will also ensure you aren’t faced with mounting surprises after moving in. Seek broker expertise to find hidden gems. With videos and virtual tours being a large part of real estate marketing, most properties can be found online. However, for various reasons, when considering purchasing a luxury home you will find plenty of options without online listings in Colorado. High-end brokers prioritizing luxury and client relationships are the best choice to find your dream home.
If luxury living in Colorado has caught your eye and you are looking to purchase a home in the Centennial State, contact a Kentwood Real Estate broker today.
The Northern Colorado market reflects a seasonal adjustment.
The data indicates the NOCO market area has shifted to a more even playing field between buyers and sellers. Compared to August 2021, inventory and days on market have gradually increased, and the market is beginning to see some price reductions.
Fort Collins detached homes sales volume decreased by 31.24%.
183 detached homes were sold in August 2022 compared to 240 in 2021, a 23.75% decrease in number of closings. Attached home sales were also significantly down from the previous year, from 79 in August 2021 to 66 this year.
Loveland detached home sales declined in August.
In Loveland’s detached market, residents saw 131 sales in August 2022 versus 171 in August 2021, a 23.39% decrease, yet the average sales price for a detached home climbed from $540,056 in 2021 to
$600,393 this year. Indicating that demand remains steady.
Boulder’s increase in sales volume year-over-year underscores resilience.
In the detached market, the total August sales volume went from $145,410,217 in 2021 to
$154,873,289 in 2022, an increase of 6.51%. However, the attached market saw a decrease in sales from 89 in August 2021 to 72 this month. Boulder is a destination and a lifestyle choice, with opportunity for both buyers and sellers.
Berthoud saw an increase in detached home prices.
Year over year in August there was a 35.66% decrease in closings. However, the average home price increased 5%, from $630,742 average price last year to $664,089 this year. Attached homes experienced an increase in total sales volume in August 2022.
Decreases year-over-year in Timnath detached homes sold.
Following a recent trend, Timnath’s detached market went from 30 homes sold in August 2021 to 13 in August 2022, a 56.67% decrease. In the attached market, Timnath experienced a decrease from 12 to 4 units sold in August. There is still opportunity for well-positioned Timnath sellers.
August 2022 showed an end-of-summer calming for Denver Metro housing.
All major housing categories point to the market slowing down. Days in the MLS went up 120% since August last year and the closed-price-to-list-price ratio dropped below 100 percent for the first time since July 2020, to 99.41% of list. Still a strong showing for well-prices homes. The median sales price decreased 2.54% from July, which could simply be the mix of home price points that closed in August.
Year-to-date, Denver Metro median sales price is up 8.49%.
The average homeowner has gained $49,233.51 in equity this year. While new listings in MLS dropped by 15.50% year-over-year in August, keeping the imbalance between supply and demand alive in some areas and price points.
The Luxury Market is also evolving.
New active listings above $1,000,000 declined over the summer – down 18.77% this August over last for detached homes and 18.31% for attached residences. Sales volume in August was $658,551,398, down 19.29% from July and 16.80% year-over-year. Sales volume year-to-date is $6,717,616,956, up 17.21% year-over-year, largely driven by the heated first half of 2022.
Median days in the MLS for August increased for both attached and detached homes.
Attached homes went under contract in 12 days, detached in 13 days. Still signifying a sellers’ market by the historical benchmark of 4-6 months inventory reflecting a market deemed evenly balanced between supply and demand. However, price reductions are more prevalent and days on market are creeping up. Perhaps indicating a balance between our historically unprecedented demand and available supply.
Months of inventory for attached and detached homes largely unmoved.
With 2.39 months of inventory for detached homes and 3.40 months for attached, it was still within the typical seller’s market range. However, compared to the intensity of the spring market, there is a trend toward more opportunity for buyers.
Summertime in Colorado is always a special time of year filled with various festivals, events and outdoor activities for everyone. With fall just around the corner, here we outline the “can’t miss” end-of-summer events for 2022.
The Telluride Jazz Fest, taking place from August 12-14 is known as “America’s Destination Jazz Festival.” The fusion of acclaimed jazz musicians and the beauty of the Telluride Town Park music venue makes this festival a once-in-a-lifetime experience. Throughout the festival, you can find pop-up shows in the town of Telluride while enjoying an array of shopping, great eats and beautiful views.
For spectators and bike enthusiasts alike, the Colorado Leadville 100 Bike Race, taking place on August 13 is a landmark event and the second-oldest of the sought-after 100-mile marathon bike races held in the United States. The race starts and finishes in Leadville, CO passing through 100 miles of extreme terrain throughout the Rocky Mountains. Spectators can enjoy the festival and award ceremony following the race in the quaint town of Leadville.
The third annual Vail Valley Brew ’Au, taking place on August 13 in one of Colorado’s premier destinations, features award-winning beer, ciders, seltzers, live music, food trucks, and of course, activities for children to ensure fun for the whole family.
A festival for peach lovers, the 23rd annual Lafayette Peach Fest on August 20 features delicious food and fun for everyone during this one-day event. With peaches from Colorado’s best orchards, food vendors, crafters, antique dealers and a balloon exhibition, you are sure to enjoy a relaxed Saturday afternoon in the Colorado sun.
The 15th-annual Handmade in Colorado Exposition takes place over three different weekends at three different venues. The first weekend, taking place in Estes Park from August 26-28 will feature unique art pieces with the talented artists that created them. You can also experience the breathtaking views, boutique shopping and live entertainment alongside one of Colorado’s leading festivals for artists.
The Colorado State Fair, hosted in Pueblo from August 26 to September 5, is one of Colorado’s largest summer events. The State Fair has family-friendly events for all age groups, ranging from Craft Brew competitions for the adults to funnel cakes and carnival rides for the kids. Be sure not to miss the exhilarating demolition derby and rodeo events, as they will be sure to pull in a crowd.
We hope the rest of your summer is filled with unforgettable memories with friends and family and you can experience some of these exceptional events put together for our Colorado community.