Its been talked about, its been hinting, and its yes it’s actually now happening — the Denver real estate market is softening. The hot days of summer have officially given way to a cooling housing market as the days (and years) of bidding wars and multiple offers come to an end. Despite rumor of the formidable words of ‘recession’ it can safely be stated, despite cooling, this market movement can be more accurately viewed as a trending toward a state of normalization. And with that, after an overheated several years, it has never been a better time to buy — [while still also being a opportune time to sell] a rare time of eating your cake and having it too.
Buyers: The stars have aligned. The housing inventory is at it’s highest point since October of 2013, with a 28% increase year over year. This does not only lead to more homes being on the market for buyers to choose from, but also gives way to the favorable side of the law of supply and demand as competition is curtailed. Furthermore, homes are also staying on the market 66% longer year to date, growing from 6 median days on market to 10. Keeping in mind however, while this increase does seem to suggest a shift toward a buyer’s market, that trend is only still only exists in the million dollar and up properties where inventory hits close to six months. Lastly, interest rates are at superlative low with further talk of decreases by the fed. As mathematics goes, the lower the interest rates, the higher the buying power, the less it costs to borrow money, ultimately keeping home buyers’ mortgage rates low. Current rates are 4.0% )30 year conventional) down significantly from the 4.65% rates we saw back in January.
Sellers: No hard feelings yet as your time to shine is not over. Despite inventory and days on market going up, you are by no means in tough times — and especially in the price point in under the $400,000 range where the largest buyer pool exists (especially with recent interest drops bringing more candidates into the game). Beyond that, with the long run of increase in home appreciation prices, it is doubtful that you’re not sitting on a hefty amount of equity even with purchases made as little as three years ago. And although we are getting later into the seasonal housing cycle where things historically tend to back off in the summer months, this year been at a bit of a untraditional with both late spring snowstorms pushing back the buying season and favorable econmic conditions extending it. What sellers DO need to be aware of is: pricing their homes too high. As price reductions become a norm instead of a rarity, listing agents need to be careful when shooting for the stars with overly high hopes on their sellers’ homes. Not only are buyers being pickier, but they are also starting to learn their leverage advantage. Homes at biggest risk of discount: those located on busy streets and with funky layouts.