All major statistical categories point towards the market slowing down. Days in the MLS went up 120 percent since last year at this time, and the close-price-to-list-price ratio dropped below 100 percent for the first time since July 2020, to 99.41 percent. Meanwhile, the median sales price decreased 2.54 percent from the previous month.
“While some individuals will take this as a sign that the real estate market is about to crash, Denver Metro has seasonality in its market and this is an example of that,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®.
“With so much instability in the economy and the world as a whole, it is difficult to forecast how the housing economy will be impacted. Interest rates are still the biggest factor in their impact on buyer demand as it is a direct correlation to monthly payments. As the Fed continues to fight inflation, interest rates will continue to be a conversation topic.”
Year-to-date, the Denver Metro is up 8.49 percent in median sales price. That translates to the average homeowner gaining $49,233.51 in equity. New listings dropped 15.50 percent year-over-year. Sellers are no longer incentivized to move as their current interest rate is most likely significantly lower than what they could get if they bought.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999).
As the Denver Metro area experiences back-to-school season, the Luxury Market saw similar occurrences to other price segments with new listings in August down 18.77 percent month-over-month for detached homes and 18.31 percent for attached. The total sales volume in August was $658,551,398, down 19.29 percent from July and 16.80 percent year-over-year. Sales volume year-to-date is $6,717,616,956, up 17.21 percent year-over-year, reflecting the heated first half of 2022 and balancing out as we get farther into the year and seasonally slower months. This market segment has grown rapidly since 2020; the year-to-date sales volume in 2020 was $2,822,161,140, a 138.03 percent increase in two years.
The median days in the MLS for August increased for both attached and detached homes at 12 days and 13 days, respectively. The close-price-to-list price ratio of detached homes dropped below 100 percent for the first time since January 2021.
“Although luxury buyers will fare better amid changing economics, they will likely adjust their buying behavior with increased frugality and patience,” said Amanda Snitker, DMAR Market Trends Committee member and Metro Denver Realtor®. “As the market balances, looking back to 2019 can help us guide our clients forward. Managing expectations is at the heart of every transaction, and although the slowing market can give everyone a bit of stress, it’s also a point of great opportunity to get back to the basics of the client-Realtor® relationship. The slowing of the market allows time for us to provide our full suite of resources to each client.”
The months of inventory for attached and detached homes in this segment stayed similar to July, with 2.39 months of inventory for detached homes and 3.40 months for attached, still within the typical seller’s market range. However, compared to the intensity of the spring market, this is a more even playing field and an opportunity for buyers in the Colorado real estate market.