The once-sizzling Denver housing market continued to dial down the temperature in August, as more homes entered the market and prices dipped.
According to the Denver Metro Association of Realtors’ (DMAR) August market survey, inventory for residential properties rose last month to its highest number in four years at 8,228. This is a 7.65% increase over July and an 11.79% increase over August of 2017.
Meanwhile, prices dropped, if slightly. The average sold price of a home is now $474,838, a 0.58% decrease from July.
Unlike months ago, when anything seemed to go in terms of price, buyers are being more selective. DMAR notes that 30% of sellers in August were forced to reduce their prices in order to make a sale; 36% of those with homes listed for between $500,000 and $749,000 dropped the price an average of $28,921 and those homes took more than four times longer to sell.
“Homes that were overpriced took an average of 48.3 days to sell, compared to 10.2 days for those homes without a price reduction,” notes DMAR chairman Steve Danyliw.
Validating the notion that the market is cooling, sellers are seeing fewer multiple offers and fewer inspection allowances and appraisal guarantees, according to DMAR.
This doesn’t mean that it’s time for sellers to panic, however. Danyliw notes that the market still favors the home seller, “and the next few months should see increased activity as buyers try to find a home for the holidays.” Also, prices in August were still 9.73% above August of 2017, and “well-priced move-in ready homes…are still selling quickly,” notes the market report.
Furthermore, rising interest rates are providing motivation for potential buyers to act sooner, rather than later. Experts predict interest rates will rise to 5.1% in 2019. And that means waiting to buy comes with a hefty price tag.
Notes DMAR: “A $425,000 home today will cost an estimated $23,800 more in purchase price in one year and $286 more a month in your mortgage payment – that’s a 13% increase or cost for waiting a year.”