Market Updates »
Most months when I sit down to write the Denver Market Update article, I can do so very quickly. Usually due to the number of transactions TK Homes is involved in, we have a very clear picture of the Denver market. However, this month’s update is not adding up to be normal, in fact, I have written this first paragraph a handful of times and deleted it. This is because the market’s current conditions are not as clear; there seems to be very small pocket markets right now or even house-specific markets.
What we are seeing is that there are some neighborhoods and price points that have seen a major shift in their markets these past few weeks. Homes that normally would have sold very quickly at or over list are sitting on the market with no offers. However, this is not across the board, in fact, just this past weekend we were still seeing homes receive multiple offers and sell for way over their list price. In short, the market is very inconsistent right now.
In part, homes do not appear to be selling as high over list as they were just a month ago; however, this doeslogically make sense. The media may try and spin this as the market slowing; the simple fact is that list prices have caught up to today’s value and are starting higher, causing buyers to not be willing to offer over list price. From personal experience, I have seen that if a home is still listed at a lower price, buyers are still more than willing to put their offers in above that list price.
We are also starting to see fewer offers on a home when it does go under contract. This is also common when the market starts to slow. Buyers may be starting to feel like they can be pickier as they aren’t seeing homes go under contract within a matter of hours. They are also seeing these higher list prices and may still remember just a few short weeks ago when they would have to go over list price to make their offer competitive. Now, they feel the home is not worth going over these new higher list prices. Both scenarios will cause buyers to pause and not submit an offer. Ultimately, fewer offers will cause prices to settle closer to that initial list price, potentially even below it.
Overall, it is my opinion that the market is currently teetering between this year’s previously extremely hot market conditions and a market that is beginning to cool off. However, at least for the moment, we are still seeing most homes sell very quickly and typically, if priced correctly, near and even over list price. Now, there are starting to be more and more homes sitting on the market for longer periods, and price reductions are having to be made to get buyers to bite. Only time will tell which direction the market goes as we head deeper into the summer months.
~ Article written by Team Leader & REALTOR®, Trevor Kohlhepp