Denver Housing Market Slowdown Overview

So welcome to my August Denver housing market update. My takeaways on this, it was slow, but I don't think people realize how slow the market really was. Okay, so I'm shooting this on August 1st. There might be a little bit of changes in the date over the next couple of days as offices enter their closed listings that happened at the end of the month. However, given that it's a Thursday, yeah, I think we got most of that data in already. So as a caveat, I will always mention this is for the South. Metro Denver, seven County Metro. Um, I use that seven County Metro statistic versus some other realtor association statistics, because I think that's more representative of our Denver Metro market. But for that seven County Denver Metro market, our average close price actually went down a little bit in July. So keep in mind, July closings were June shoppers. So these most were contracts that got, um, that are most of these were properties that went under contract in June and then closed in July. So our price went down about 12K, which is not terribly unusual, right? We usually kind of peak out in June, and that's pretty typical, even through the craziness of 2021 and then 2022. Well, 2022 was when the rates went up and everything else. We peaked out early, but we still kind of had our secondary shopping peak in June, and then it tapered off a little bit more seasonal like it would for the end of the year. So that's pretty normal is to kind of top out in that May-June timeframe. So just over $700,000 for our average close price for residential properties. And our median was essentially flat at 600. A couple of things that I want to point out. I'm going to make this a pretty quick one today because there's really nothing amazing other than showing you how slow it really is as far as how few transactions are happening that a lot of people don't understand the pace of our market and that we haven't seen this pace in a really long time. So last month I talked a lot about months of supply, right? And how we were hitting the highest months of supply since... 2013, I believe it was. The highest June months of supply since October 2012 and 2013 in the fall. So I expected it to go up a little bit, honestly, just because anecdotally what I'm seeing with my listings and my clients, I'm seeing more inventory, significantly more inventory than I did a month ago. However, there's also a little bit more buyer activity going on, at least anecdotally, but that doesn't necessarily reflect in the pending listings for the market. So Anyway, we're essentially still at about three months of inventory. This is the closest thing that I've personally seen to a balanced market in about, I mean, I've been doing this almost 10 years and it feels the most balanced to me as far as sellers and buyers both having some leverage in the market, right? I still, historically, there's a lot of discussion around six months of supply is a balanced market. But that a lot of times was based on when the market didn't move as quickly as it does now. So not everybody had access to listings online through syndication sites like Realtor.com or Zillow or Redfin or things like that, or any other brokerage IDX web search. So people couldn't find houses as fast. It took longer to get properties prepped and on the market. So I think three to four months is a little bit more balanced. And I think there's a lot of other colleagues and people in the industry that I've spoken to that that's their impression of a little bit more of a balanced market. Right. And we're there. Like this is the most balance it's been that I've seen in a while. As you can see, like I mentioned last month. So most inventory since fall of, here we go, 2013. Yeah. Since 2013, I was off by a year. So you can see it feels slow right now and that's okay. It hasn't happened in a long time. That's what makes people feel a little bit uncomfortable. I'll talk about how slow it really is after a couple more points. So close price to list price. it's going down a little bit. There's still a little bit of leverage out there, but you're going to see this continue to go down for the next few months. Buyers are going to have more leverage as the market slows and seasonality and things like that, unless there's major changes in the interest rate or something spurs those buyers to come back into the market. Like I said, I've seen more buyer activity in the last month, the last really two to three weeks than I was expecting. And I'm kind of surprised. So, but that doesn't quite show in our pending listings for the month of July just yet. Days in MLS. This is most important for sellers. Average days in the MLS is 29 here. I'll zoom this in a little bit so we don't have all this stuff, but so average days on the market, nearly a month. Median is running right about two weeks, 15 days. So don't be surprised if the house doesn't sell in one weekend, it doesn't mean there's something wrong with it. It just means the market is doing what it's doing. Okay. And let's go ahead and hit price per square foot. This is something I mentioned. You're going to see the price per square foot go down as the seasonality goes down a little bit. People are, and for investors out there, a lot of times when they're looking to pick up properties in the second half of the year, when they know there's some good opportunities to be had and some good buys, then, sorry about that. Then I will set a price per square foot search for them for their ideal property type in their area, because it's a great way to automatically sort through things in the market and pick up a good deal, so to speak. So it doesn't work for everybody, but especially for investors, I think that's a really good search criteria. And so I may set, you know, for a particular neighborhood or something, if I know the typical price per square foot for that particular neighborhood is, you know, $275 a square foot, maybe we'll set a search down to 250 or something like that. where it's an easy way to pick up a deal. And closed listings. So this is the one, like I said, this was going to be a quick one, guys. I don't want to bore you with a whole bunch of stuff you already know. Actually, shows depending we talked about, or yeah, shows depending. No, we didn't talk about this one yet. We talked about the days in the MLS taking about a month. Shows depending, and I tell all my sellers this, it's going to take probably 12 to 14, 12 to 15 showings to likely get an offer. And if we're not getting an offer after that many showings, Then are we off pace? Is it a different segment of the market? Granted, this is a picture for the market as a whole, right? If we were to split that out into property types, for example, there's a couple in here I'm going to turn off like fractional and multifamily is a hot mess because of how they change the categorization in the MLS. So getting rid of those and say, okay, there's a small difference. Condos two months ago, weren't taking as many showings to get to pending. Now. they're taking a couple more, but still not as many single family homes. So we can narrow it down by property type to have a better idea, but I'm telling my sellers, here's about how many showings we should be having in this period of time, given what the market is doing. And if we're not, where are we off? Is it something we can change? Is it our location? Is it finishes? Is it, you know, how the property presents all that kind of stuff. So those are discussions we're having, but about every, I say 12 to 14, 12 to 15 showings, um, median. Is it nine? That still feels really low to me based on what the market's showing. So, and also showings per listing is right now only at about five a month, one a week. It's pretty slow. So that's why it's taken some time to get these under contract. And now I'm going to go ahead and hit that close listings. So you want to know how slow it was? We, for the Denver Metro area, there were a little over 3,300 residential properties. that closed for that seven county Metro. You're like, okay, cool. Well, I see that it goes up and it goes down and it goes up and it goes down. Okay. So what I did was I took the max, I exported this into a table because I'm crazy and I enjoy these things. And I pulled out all the Julys and you can see July that we just closed the end of the month. It was the least number of closed residential properties in the seven county Denver Metro since 2010. Things were a bit slow then. It's a little less than 2011. So almost as many as 2011. But that's a long time that we've had consistent spring and summer markets. And so for the buyers out there, that's why you have had leverage. For the sellers out there, that's why things aren't flying off the shelf like they have in the last 10 years that we've been really spoiled 10, 12 years. So things just aren't moving as quickly. It's more of a balanced market. And understanding the market that we are currently in when you need to take action and when your life changes, understanding that market and where it may go or what makes sense for your life is really important. So that's why I sit down, I do consults with all my buyers, with all my sellers, say, hey, what are your goals? What's your timeline look like? Given the market right now and given where it could likely go, granted the crystal ball is always a little bit. cloudy, right? But we try to use data to have some projections or ideas of what might happen there. Then do we strategically, do we want to wait? Do we want to do things now? What are, what are the options? What are the pros and what are the cons? And let's make a plan that makes sense for you. So anyway, that's going to be my market update for today. If that was helpful, or you got a cool tidbit out of that, please hit the like button down below. That will help other people find it. You can always subscribe to my channel. I have tons of analytical content on here related to real estate, seller tips, buyer tips. neighborhood tours, property tours, all that wonderful stuff. And of course, if you're looking to buy or sell, please feel free to reach out to me. I have an appointment link down below where you can pick a time right off my calendar. Let's make it easy to sit down and make a game plan for you. So thanks so much for the time and have a great day.

So as a caveat, I will always mention this is for the South. Metro Denver, seven County Metro. Um, I use that seven County Metro statistic versus some other realtor association statistics, because I think that's more representative of our Denver Metro market.

But for that seven County Denver Metro market, our average close price actually went down a little bit in July. So keep in mind, July closings were June shoppers. So these most were contracts that got, um, that are most of these were properties that went under contract in June and then closed in July. So our price went down about 12K, which is not terribly unusual, right? We usually kind of peak out in June, and that's pretty typical, even through the craziness of 2021 and then 2022. Well, 2022 was when the rates went up and everything else.

We peaked out early, but we still kind of had our secondary shopping peak in June, and then it tapered off a little bit more seasonal like it would for the end of the year. So that's pretty normal is to kind of top out in that May-June timeframe. So just over $700,000 for our average close price for residential properties. And our median was essentially flat at 600. A couple of things that I want to point out. I'm going to make this a pretty quick one today because there's really nothing amazing other than showing you how slow it really is as far as how few transactions are happening that a lot of people don't understand the pace of our market and that we haven't seen this pace in a really long time.

So last month I talked a lot about months of supply, right? And how we were hitting the highest months of supply since... 2013, I believe it was. The highest June months of supply since October 2012 and 2013 in the fall.

So I expected it to go up a little bit, honestly, just because anecdotally what I'm seeing with my listings and my clients, I'm seeing more inventory, significantly more inventory than I did a month ago. However, there's also a little bit more buyer activity going on, at least anecdotally, but that doesn't necessarily reflect in the pending listings for the market. So Anyway, we're essentially still at about three months of inventory.

This is the closest thing that I've personally seen to a balanced market in about, I mean, I've been doing this almost 10 years and it feels the most balanced to me as far as sellers and buyers both having some leverage in the market, right? I still, historically, there's a lot of discussion around six months of supply is a balanced market. But that a lot of times was based on when the market didn't move as quickly as it does now. So not everybody had access to listings online through syndication sites like Realtor.com or Zillow or Redfin or things like that, or any other brokerage IDX web search. So people couldn't find houses as fast.

It took longer to get properties prepped and on the market. So I think three to four months is a little bit more balanced. And I think there's a lot of other colleagues and people in the industry that I've spoken to that that's their impression of a little bit more of a balanced market.

Right. And we're there. Like this is the most balance it's been that I've seen in a while.

As you can see, like I mentioned last month. So most inventory since fall of, here we go, 2013. Yeah. Since 2013, I was off by a year. So you can see it feels slow right now and that's okay.

It hasn't happened in a long time. That's what makes people feel a little bit uncomfortable. I'll talk about how slow it really is after a couple more points. So close price to list price. it's going down a little bit.

There's still a little bit of leverage out there, but you're going to see this continue to go down for the next few months. Buyers are going to have more leverage as the market slows and seasonality and things like that, unless there's major changes in the interest rate or something spurs those buyers to come back into the market. Like I said, I've seen more buyer activity in the last month, the last really two to three weeks than I was expecting.

And I'm kind of surprised. So, but that doesn't quite show in our pending listings for the month of July just yet. Days in MLS.

This is most important for sellers. Average days in the MLS is 29 here. I'll zoom this in a little bit so we don't have all this stuff, but so average days on the market, nearly a month.

Median is running right about two weeks, 15 days. So don't be surprised if the house doesn't sell in one weekend, it doesn't mean there's something wrong with it. It just means the market is doing what it's doing.

Okay. And let's go ahead and hit price per square foot. This is something I mentioned. You're going to see the price per square foot go down as the seasonality goes down a little bit.

People are, and for investors out there, a lot of times when they're looking to pick up properties in the second half of the year, when they know there's some good opportunities to be had and some good buys, then, sorry about that. Then I will set a price per square foot search for them for their ideal property type in their area, because it's a great way to automatically sort through things in the market and pick up a good deal, so to speak. So it doesn't work for everybody, but especially for investors, I think that's a really good search criteria. And so I may set, you know, for a particular neighborhood or something, if I know the typical price per square foot for that particular neighborhood is, you know, $275 a square foot, maybe we'll set a search down to 250 or something like that.

where it's an easy way to pick up a deal. And closed listings. So this is the one, like I said, this was going to be a quick one, guys.

I don't want to bore you with a whole bunch of stuff you already know. Actually, shows depending we talked about, or yeah, shows depending. No, we didn't talk about this one yet. We talked about the days in the MLS taking about a month. Shows depending, and I tell all my sellers this, it's going to take probably 12 to 14, 12 to 15 showings to likely get an offer.

And if we're not getting an offer after that many showings, Then are we off pace? Is it a different segment of the market? Granted, this is a picture for the market as a whole, right? If we were to split that out into property types, for example, there's a couple in here I'm going to turn off like fractional and multifamily is a hot mess because of how they change the categorization in the MLS.

So getting rid of those and say, okay, there's a small difference. Condos two months ago, weren't taking as many showings to get to pending. Now. they're taking a couple more, but still not as many single family homes.

So we can narrow it down by property type to have a better idea, but I'm telling my sellers, here's about how many showings we should be having in this period of time, given what the market is doing. And if we're not, where are we off? Is it something we can change? Is it our location?

Is it finishes? Is it, you know, how the property presents all that kind of stuff. So those are discussions we're having, but about every, I say 12 to 14, 12 to 15 showings, um, median.

Is it nine? That still feels really low to me based on what the market's showing. So, and also showings per listing is right now only at about five a month, one a week. It's pretty slow. So that's why it's taken some time to get these under contract.

And now I'm going to go ahead and hit that close listings. So you want to know how slow it was? We, for the Denver Metro area, there were a little over 3,300 residential properties. that closed for that seven county Metro.

You're like, okay, cool. Well, I see that it goes up and it goes down and it goes up and it goes down. Okay. So what I did was I took the max, I exported this into a table because I'm crazy and I enjoy these things. And I pulled out all the Julys and you can see July that we just closed the end of the month.

It was the least number of closed residential properties in the seven county Denver Metro since 2010. Things were a bit slow then. It's a little less than 2011. So almost as many as 2011. But that's a long time that we've had consistent spring and summer markets. And so for the buyers out there, that's why you have had leverage.

For the sellers out there, that's why things aren't flying off the shelf like they have in the last 10 years that we've been really spoiled 10, 12 years. So things just aren't moving as quickly. It's more of a balanced market. And understanding the market that we are currently in when you need to take action and when your life changes, understanding that market and where it may go or what makes sense for your life is really important. So that's why I sit down, I do consults with all my buyers, with all my sellers, say, hey, what are your goals?

What's your timeline look like? Given the market right now and given where it could likely go, granted the crystal ball is always a little bit. cloudy, right? But we try to use data to have some projections or ideas of what might happen there.

Then do we strategically, do we want to wait? Do we want to do things now? What are, what are the options? What are the pros and what are the cons? And let's make a plan that makes sense for you.

So anyway, that's going to be my market update for today. If that was helpful, or you got a cool tidbit out of that, please hit the like button down below. That will help other people find it.

You can always subscribe to my channel. I have tons of analytical content on here related to real estate, seller tips, buyer tips. neighborhood tours, property tours, all that wonderful stuff.

And of course, if you're looking to buy or sell, please feel free to reach out to me. I have an appointment link down below where you can pick a time right off my calendar. Let's make it easy to sit down and make a game plan for you.

So thanks so much for the time and have a great day.

Transcript for:Denver Housing Market Slowdown Overview

Transcript for:
Denver Housing Market Slowdown Overview