It is officially summer, with graduations taking place at local parks and kids sleeping in until noon. Historically, this means Denver’s real estate market is in full bloom with buyers and sellers putting together agreements and buying and selling homes! However, Denver’s market is looking a little different as we settle into the summer season.

On the surface, Denver’s market appears to be closely following its normal trend, with home values increasing month over month, based on data from the Denver Metro Association of Realtors® (DMAR). In fact, according to DMAR, home values were up 2.24% in May. However, if you look at the big picture, it’s a very different story.

The number of new listings for the Denver metro area for May was down nearly 10%; this is important because, historically, we see more homeowners putting their home on the market as we head into the summer, but not this year. Even more telling is that even though the number of new listings hitting the market was down 10%, the number of active homes for sale was up over 6%. This means that even with fewer homes coming on the market, there’s still more inventory for sale than last month. This stat alone shows what many home sellers across the Denver metro area are feeling—homes are sitting and taking longer to sell. So why does the DMAR stat show that Denver home values were up 2.24% last month?

The issue with this stat and why it looks like home values are going up when the average home’s value, in reality, is staying flat or even going down, is due to the current nature of the homes that are commonly selling. Right now, we are more commonly seeing homes that are fully remodeled, have unique features like mountain views, walkout basements, and high-end finishes sell, while a more standard home is sitting and taking longer to sell. These unique homes do tend to sell for a higher price. On top of this, we are seeing that the higher-priced homes are getting more homebuyer activity because these buyers are able to absorb the higher cost of gas prices and inflation that we are currently experiencing. Both of these trends result in more homes that are priced higher selling versus the lower priced homes that may be sitting and taking longer to sell. This means the real issue with this stat is that it doesn’t take into consideration price point of homes selling and only looks at the actual homes that have sold, which tend to be the higher priced homes, causing this value to appear to be higher than previous months.

With fewer buyers entering the market, we are seeing Denver home inventory continue to creep up. In fact, we just saw inventory levels reach over 3 months’ supply. This is the first time we’ve seen this amount of supply since well before COVID. This means that Denver homes for sale are often seeing fewer showings and taking longer to sell. Buyers today are very picky; the smallest details can be the difference between making an offer and continuing to see what else is out there. Buyers will often visit a home multiple times as well before making a decision to write an offer. This means sellers need to be patient and trust the selling process, and more than ever, they need to be working with an agent that understands today’s market conditions and has the experience to put together a strong marketing strategy to attract picky buyers.

Buyers have more options when it comes to buying. They can take their time viewing as many homes as they’d like and circle back to homes that pique their interest. When they do find a home they are excited about, in many cases, they are able to negotiate on the purchase price and also get concessions upfront for closing costs or rate buydowns. Now is a great time to be a Denver homebuyer, especially if you’re buying a home you plan on staying in for the next 5+ years.

With today’s complex market, it’s more important than ever to work with a real estate professional that understands the Denver market conditions. This will ensure you are able to sell your home for the most money or purchase a home with the most favorable terms. TK Homes takes the time to understand the Denver market and has the experience to put this knowledge to work for you. Contact us today and let’s talk about how we can make your real estate goals a reality!

~ Written by CEO/REALTOR® Trevor Kohlhepp