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We are officially rounding off the final month in the 3rd quarter of 2024. If you’re reading this, then you must be wondering how Denver’s real estate market is holding up. Summer vacations are officially coming to an end, and kids are forced to get back to their school routine. Summer is quickly becoming a mere memory. Likewise, so are eager buyers knocking down doors to purchase a Denver area home. This time of year, it’s not uncommon to see a historical slowdown, but something feels different about fall 2024.

Sellers seem to be rushing to try and get their homes on the market hoping to beat the fall slowdown; this trend is causing higher inventory levels than we’ve seen throughout the year. In fact, inventory levels are 40% higher today than this same time last year. However, most sellers with homes for sale right now would report that sellers might have already missed the summer selling season.

When reviewing homes for sale, showing numbers are way down, with many homes only seeing one or two showings per weekend or even none at all. With the higher inventory levels and fewer buyers in the market, it’s not a surprise that we’re seeing a vast number of price reductions throughout the Denver metro area. For example, at the time of writing this article, there were over 1,900 price reductions within the past seven days. This is roughly 600 more homes with price reductions than went under contract. With homes sitting on the market for longer, with few to no regular showings and the common trend of price reductions, it should be no surprise that values across Denver are trending downward.

What might be surprising is that while we’re seeing a strong downward trend in values, we’re also seeing a downward trend in interest rates. For the first time in at least one year, interest rates have retreated and sit comfortably in that low 6 to mid 6’s range. Some borrowers could be seeing loan approvals at a whole interest rate lower than they might have seen earlier this year. Yet, to date, this has not been enough to excite buyers who have been waiting for lower interest rates to jump into the market and create that buyer’s frenzy many sellers and industry professionals have been hoping for.

It could be that buyers are holding out for even lower rates that are expected to be seen in 2025. Or maybe buyers feel that with all the hype right now—with the Feds doing their first rate cut in September—by being just a little more patient, they could snag an even lower rate in a few weeks. However, my opinion and the opinion of other industry experts is that the lower rate we’re already seeing is due to the expectation of the September rate cut. If I am right, we won’t likely see mortgage rates drop any further due to this month’s rate cut, that’s if it even happens.  If rates remain flat after the Fed’s rate cut, we might see a slight bump of buyers coming back into the market once they accept this is our new and, thankfully, lower rate until the Feds decide to make another rate cut.

For now, as long as inventory levels remain higher and more sellers jump into the market while buyers sit out, it looks like Denver is set up for noticeable deprecation this fall. How much depreciation and for long we see that depreciation is yet to be seen.

While the future of Denver’s home value trends is unknown, TK Homes will be watching the market closely. We will continue to provide an honest, no-fluff update on Denver’s real estate market conditions every first Thursday of the month. Be sure to check back with us next month to see if we see lower interest rates and increased buyer demand or if values continue to trend downward.

Don’t forget, if you have any real estate questions, if you are thinking about buying or selling a home in Denver, or just want to chat about real estate, contact us today. We’re always available to help make your real estate goals a reality!

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