Uncertainty categorizes the nation’s overall economic climate. But what does it mean for Realtors® and their clients in Denver-area’s housing market? Global growth and business confidence are down while consumer spending remains up. Low interest rates and rising family income are improving affordability and offsetting the effects of the continued lack of – albeit steadily rising – housing inventory.
Generally speaking, real estate conditions are good for both homebuyers and sellers alike as we enter into a more balanced market.
In August, homes under contract were up compared to July and year over year. So, why were the number of homes sold month-over-month and year-over-year down? Homebuyers are becoming more discerning and sense the approaching market shift to be in their favor. While we are technically still in a seller’s market with 1.81 months of inventory, the increase in inventory is giving buyers more choices and more time to choose – as evident in that the median days on market jumped up 27.27% from July to August and up a significant 57.14% year to date compared to last year.
Additionally, buyers have been able to do some negotiating as the close-to-list-price ratio dropped to 99.36% year to date, compared to above 100% at this point in the past few years. The lower interest rates also improved their buying power allowing some to move up in price.
While home sellers may not be selling their homes as quickly, they are still getting more money than they would have last year. Average and median sold prices dropped a bit month over month but were up 2.22% and 1.45% respectively year to date compared to 2018.
The Luxury Market (homes priced $1 million+) remains strong. The number of luxury homes sold continues to grow, average price has held strong since 2015 at around $1.5 million, and average days on market is down four days to 59 from 62 at this time last year.