News & Events »
Everywhere we turn, there’s a pumpkin spice latte, pumpkin cream banana bread, or anything and everything else pumpkin being advertised to us. This can only mean one thing: it’s October. Since I might be the only person in Colorado who doesn’t like pumpkin flavored treats, I’ll instead share with you the current Denver metro area market conditions. Luckily for me, there’s no pumpkin flavor involved there!
If you’ve been following our Denver Market Update blogs, you know that Denver’s real estate market has been seeing a market cool off with home values dipping since around July. Even though values dipping in Denver this time of year is just as common as the return of the pumpkin spice latte, we are watching market conditions very closely to see just how much of a dip we might expect to see. Last year in the spring of 2022, home values in Denver jumped nearly 20%, and then fell roughly 10% during our end of year cool off. This allowed Denver values to still end the year with a strong 10% appreciation.
In 2023, we saw 7.5% appreciation between January and July, which in itself is very strong; however, if we see the same 10% loss of value at the end of 2023 like we did in 2022, we could see home values sitting below where they were at the beginning of the year. So, what is the market doing right now you ask? Grab your pumpkin spice caramel mocha, and let’s dive into it.
Most of September’s market felt very similar to August, with homes sitting on the market and seeing more price reductions than showings. This trend is what will cause values to dip. However, in the last week of September, there was a slight change seen around the Denver metro area. There was a sudden increase in showings and even homes going under contract. It is important to mention that just because we saw increased showings and homes going under contract, this does not mean buyers were offering over list or even list price. It means that buyers were showing more signs of being active and making offers.
One theory could be that many homebuyers realized that if they were to go under contract now, they’d be in their new home before the holidays. Another theory could be that with two months of depreciation, buyers wanted to jump into the market and take advantage of lower purchase prices and/or better terms in regard to seller concessions. The third and final theory would be that it just so happened that enough homes that have been sitting on the market doing price reduction after price reduction finally hit the price point where buyers felt like they couldn’t sit back and watch anymore and decided to take action.
Regardless of the why, this small uptick in movement in the market could be enough to level out our depreciation for a month, and potentially change the whole course of Denver’s real estate market for 2023. If this change in movement with the market is enough to trigger more buyers to jump back in the market to take advantage of lower prices, we could see home values level out for the remainder of 2023, giving 2023 roughly 4.5% appreciation for the year. However, I am not confident that this is going to be the outcome we’re talking about in December when we do our year recap blog.
Instead, I suspect we might see home values remain flat through October, and then when we get into the holidays in November and December, we’ll see another two months of depreciation. If the depreciation is similar to August and September, we would see another 3% of lost value, which would make us end the year with a net appreciation of roughly 1.5%. Although 1.5% might not be the double-digit appreciation figures we have become used to in the Denver area, it’s better than the alternative: depreciation.
Only time will tell how 2023 will end, but one thing is certain: TK Homes will be closely monitoring market conditions and will continue to help Denver home sellers and buyers with their real estate goals regardless of what the market is doing. If you have any real estate questions or needs, contact us today. Whether I understand it or not, enjoy the upcoming fall and all of those pumpkin flavored treats you can only get this time of year!
~ Written by CEO/REALTOR® Trevor Kohlhepp