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Although we are sharing our Denver Market Update a week later than normal due to the 4th of July holiday, we are providing the same great update on Denver’s current real estate market conditions.
With temperatures settling into the 90’s most days, it feels like summer is finally hitting Colorado. However, with summer more than half behind us, Denver’s real estate market might not be reaching the same highs. In fact, many homes are seeing a cool off, with several price reductions, and homes are sitting on the market for longer before going under contract. There have been nearly 1300 price reductions in the past seven days within the Denver Metro market.
Although this number is definitely higher than we’ve seen in previous months, it is important to also note that we saw just over 1350 homes go under contact in this same time period. This tells us that homes that are priced correctly are still seeing demand and going under contract. But what does the right price look like?
This time of year is always a challenge when it comes to pricing homes; often agents and sellers alike want to use the most recent sold homes to determine their starting price. This is usually the right strategy; however, once we start seeing a high number of price reductions, like now, starting where previous homes sold is usually too high. The historic market trends tell us that homes sell for the highest amount in April through June. This would mean in July, homes will typically sell for less than the comps that we’re using to value those homes. We usually refer to this time period as the fall slowdown. It is because of this that we see a high number of price reductions.
The good news is that with over 1350 new homes under contract, we can confidently say there is still a high level of demand from buyers, which will keep home values from slipping too much during the month of July. We will, however, continue to watch market conditions to see what happens as we head further into the summer and fall.
One big area of concern is interest rates, which are hovering in the high 6’s to low 7’s right now. With lots of talk of additional rate hikes from the Feds, there doesn’t seem to be any relief from high interest rates in the immediate future. These higher interest rates and the time of the year very well could put downward pressure on the market, causing values to slide further as we head towards the second and final half of the year.
The good news is you don’t have to guess what is happening in the market. Come back every first Thursday of each month for our TK Homes Denver Market Update. If you’re thinking about buying or selling a home, contact us today, and let’s chat about your specific goals and situation!
~ Written by CEO/REALTOR® Trevor Kohlhepp