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If it wasn’t for all the fireworks going off in the background each night, I might not believe it’s already July 2024. The first half of the year is officially behind us. That means Denver’s historically busy season for home sales is also half over. However, if you’ve been staying up on our monthly Denver Market Update articles, it’s no surprise that 2024 has not been following the historical trends, and this month’s update is no different.

The big question we were waiting to have answered is if last month’s depreciation, which is unheard of in May, was going to continue through June. With the stats officially in from DMAR, it looks like that was just a fluke as the median sold price for June is officially up 1.33%. Although this appreciation was still small, it was enough to erase the depreciation from May and create new high values to date in 2024. In fact, some neighborhoods are even seeing homes sell for higher values than we saw in the previous 2022 peak. Even though values might be near or higher than the 2022 peak, the market is very different than what we saw the last time values were this high.

 

One of the biggest differences in today’s market is the number of homes for sale. At the time of writing this article, there are over 10,000 homes for sale and a total of 2.78 months of inventory. We have not seen this level of inventory since before the COVID years, and the current trend is that inventory levels are continuing to climb. Inventory levels are up nearly 12% just from last month. So, how is it that values are rising along with inventory levels? My theory on this is the rarely talked about fact that there are really two different market types in Denver right now: the luxury market, homes priced above $750,000, and those priced below. One of those markets could be driving the median price up.

The market that is more of a seller’s market and driving the median sales price up might not be the market you’d expect. The higher priced homes, especially neighborhoods priced above $1,000,000, are often selling quicker, in some cases, even with multiple offers driving the sold price above the original asking price. With this market seeing homes sell quickly and for higher values, it could be enough to drive the median sold price upward, while lower priced homes are sitting on the market longer and often see multiple price reductions before attracting a buyer. If this theory is correct, it could explain why inventory levels are rising at the same time as the median sold value.

Another fact to keep in mind when you look at Denver’s historical trends is that the market usually sees a very noticeable slowdown in July and August. At TK Homes, we call this the seasonal or fall slowdown. With inventory levels already higher, interest rates remaining high, and the seasonal slowdown just around the corner, Denver’s market could be set up for a sizable deprecation the second half of 2024.

 

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With no one having a crystal ball for what is to come, buyers should proceed with some caution and ensure that they can see themselves in the home they are buying for the next 4-5 years. This will ensure they are not upside down during a slower market. Sellers need to ensure they are not overvaluing their homes and giving themselves time to find the right buyer. The days sellers can list on a Thursday and be nearly guaranteed to be under contract come Monday are behind us. Buyers are getting very used to having more choices when it comes to purchasing and being able to ask for just about anything they want during inspection. If a seller doesn’t agree with this, buyers don’t have an issue with terminating and moving on to the next home for sale.

The Denver market is very complex and is trudging along its own path in 2024. With the right guidance, sellers should be able to net more money for their homes than previous years, and buyers will be able to be pickier with what they purchase and get more during inspections. There’s opportunity for both buyers and sellers right now, as long as they approach the market with the right information. Working with a TK Homes agent who understands Denver’s complex market and how to navigate it is the best way to be sure you’re buying or selling with success in mind. Contact a TK Homes agent today, and let’s talk about what your next move looks like, regardless of Denver’s market conditions.

 


~ Written by TK Homes CEO/REALTOR®, Trevor Kohlhepp

 

 

 

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