The numbers are in and it’s been a wild ride! The year started with an insane first quarter, with buyers offering more than $100k over asking price, waiving inspections, covering appraisal gaps. And then, interest rates went up, showings dropped off, prices came down, and the market got… quiet.
It is common for the Denver real estate market to expect a seasonal slow down after July 4th, but this year’s cooling happened early. With the rise in inflation, the Feds pushed hard on rates and buyers pulled back. Many were exhausted by the Q1 rush, some felt the effects of the stock market, while others feared the increased interest rates. When rates rise 1 point, that’s a 10% reduction in buying power. A reduction in the loan amount often moves a buyer into a lower, more competitive, price point. Home prices have adjusted to these changes, leveling off a bit and shifting toward more balance, between home buyers and sellers.
“Every indicator points to the market shifting closer to a buyer’s market. The month-end active listing increased 21.53 percent last month, pending and closed deals decreased and days in the MLS increased by 30 percent. We are still a long way from what many experts would consider a buyer’s market.” -Andrew Abrams, DMAR Trends Committee Chair
With the number of residential homes on the rise, buyers have more options, but sellers see themselves with more competition than they did earlier in the year. The average close price saw a minor dip from the prior month but year over year, there was a 11.04% increase. As for days on market, there was both an increase from last month and from the same time in 2021.
With all the changes in the economy, we are not surprised to see movement in the real estate market too. However, don’t let the numbers keep you from your end goal. Whether that’s buying, selling, or investing one thing I know is that its your life that moves you, not the market. NOW is always the right time if it fits your personal situation.
Looking for more explanation on all of this? Comment, call/text/email and let’s have a conversation. Or if you’re shy like me, check out the Market Report for Q2 . If you want to see where we are today, click on the Denver Metro Association of Realtors Market Trends Report for August.