According to a report released Wednesday by the Denver Metro Association of Realtors, evidence of a cooling Denver-area home sales market piled up in June, as the amount of inventory in single-family homes and condominiums increased significantly. from May to June.
The number of homes for sale at the end of June stood at 6,057 – a 65.85% spike from May and almost double the number of homes available for sale in June 2021.
While June almost always brings more inventory, the increase is usually around 8%, said Dan Turner, realtor and owner of South Denver Digs Realty.
“We have to remember that 2021 was the lowest inventory record at 3,122 listings,” Turner said via email. “The record was 31,900! Although this was a big leap forward, we are still well below where we need to be for a balanced market.”
The average selling price – $719,210 – and median selling price – $615,000 – in June were virtually unchanged from the previous month. But they showed a double-digit percentage increase from June 2021 – 12.11% for the average sale price and 12.84% for the median sale price.
“As month-end active inventory soars, Metro Denver hit a new all-time high for the average price of abutting (condominium) properties at $504,193,” wrote Trends Committee Chairman Andre Abrams. of the association’s market, in the report. “The dichotomy of these statistics reflects the first six months of this year (the record prices) and where we are going (the dramatic increase in inventories).”
The number of closings in June fell from May (-12.42%) and year over year (-23.63%), to 5,090 homes sold. Average days on market increased to 10 days in June, up one day from May and the same as June 2021.
With inventory rising, “expect more balance and several months with stable prices,” Abrams wrote. “This is also reflected in inventory months, which is now at 1.19. This is the first time it has been above one since June 2020. The stock market, inflation and cryptocurrency have all taken a hit over the last few months. Housing will eventually fall victim to the economy as a whole. How much is still to be seen.
“There’s definitely some unrest out there,” Turner said.
Price reductions are becoming the norm as sellers adapt to changing market conditions, Turner said.
“The only ones that aren’t slashing prices are the very select, well-made, high-end homes that are in pristine condition and are getting full-price offers, or bidding wars now,” he said.
His office’s calculations show that 27% of listings were subject to price cuts in June, Turner said.
“This increase in supply will impact prices, days in the MLS (Multiple Listing Service), and the relationship between buyers and sellers…but not yet,” Abrams wrote. “The same goes for interest rates, which have had a negative impact on the purchasing power of buyers.”
Turner used the example of buyers who were pre-approved for $875,000 in December and are now approved for $725,000.
“It’s an entirely different home class than what they had envisioned before,” Turner said. “It drove them out of the neighborhood where they wanted to live. They want to upgrade, but they are holding back research due to rising costs.
“When it comes to sellers, I don’t think it’s time to panic. But they need to be realistic with their prices. I’m sure the details matter. Sellers will have to do the little things and will have to fix broken items. when selling. I think houses will always sell, but not on the first weekend for much more than the asking price.
The association uses data from the Denver metro area of 11 counties when compiling its market trends report.