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Facts Denver Home Sellers Must Know Before Selling

Sep 28, 2023 admin

Denver home values have been dipping for two consecutive months now. In fact, home values in Denver peaked for 2023 sometime in June. In July and August, we’ve seen a combined depreciation of roughly 3%. It’s my opinion that we will see similar data for September with home values continuing to slide.

This is important for home sellers to know when pricing their home. Your value is not going to be the same as the homes that recently sold in your neighborhood; your value will be roughly 3% less.

1. Home Values Are Down »

2. Buyers Have More Choices »

With values down and many homes hitting the market at the previous sold prices, many homes are sitting on the market versus going under contract. This trend has been taking place for the last several weeks. With each passing week, inventory levels continue to rise. This creates more opportunity for buyers and choices when purchasing a home.

When buyers have more choices, they can be pickier with what they view and what they purchase. More options mean sellers must ensure they are offering good value for the price they are asking for their home; otherwise, buyers will simply view other homes for sale nearby that offer better value.

3. Buyers Aren’t Afraid of Walking Away »

There was a time when if they went under contract buyers were just grateful to have a home under contract. That meant they would almost live with anything that came up during inspection or a low appraisal. However, with buyers having so many new choices when buying a home, they are more likely to walk away with any amount of surprise found during inspection or a low appraisal. This is resulting in many buyers terminating after inspections and forcing homes to go back on the market.

Because buyers are not afraid to walk away, sellers need to take pre-inspections on big ticket items such as roofs, electrical, HVAC, etc. more seriously. By reducing the chance of surprises before going on the market, sellers greatly reduce the chance of a termination from a buyer who already has one foot out the door.

4. Homes Needing Work Are Worth Less »

Almost every buyer in the market would prefer to buy a home that doesn’t need work. This is as true today as it was two years ago. Because of this fact, as well as there being more homes for sale, buyers need more motivation or reason to buy a home that isn’t perfect. This motivation and reasoning comes in the form of a lower purchase price. The gap between a home needing remodeling and a home in perfect condition has grown in the past couple of months.

To help reduce the gap between a home needing repairs/remodeling and that perfect home, sellers might be better off making some upgrades to their home before selling. This does not mean we’re recommending a complete kitchen remodel or bathroom overhaul. Buying fresh paint and new carpet might increase your home’s value by a lot more than cost of these items in today’s market.

5. Home Values Might Not Be Higher in 2024 »

It is a fact that home values in Denver almost always slide downward in the fall months. This is why many homeowners and sellers decide to wait to put their homes on the market until after the first of the year. However, with current market conditions, it is important to note there is no guarantee that values will bounce back above this year’s peak or even today’s value. If we look at history, values peaked in 2022 in April, they dropped slightly in May and then leveled off until July. From July to the end of the year, we saw depreciation month after month until January of 2023. Then, from January until June, we saw appreciation, but not enough to gain back the depreciation we saw at the end of 2022.

Market conditions are very similar now in 2023 as they were this same time period in 2022. Interest rates are high, inventory levels are increasing, and values are coming down. If we are at the beginning of this trend, and we continue to see the same level of depreciation we’ve seen the last two months through the end of the year, we could end the year with negative values in 2023. Then, if 2024 has a similar trend as 2023, we might not see enough appreciation the first half of the year to make up the depreciation we’re seeing right now.

The Denver market conditions are never guaranteed, and unfortunately, there is no way to know exactly what the future values in Denver hold. However, we do know what the current market conditions are and can use history to help give us an idea of what might be heading our direction. One thing is for sure, Denver remains in demand. Although not at the level they once were, homes are selling across the state, and there are still active buyers in the market. Sellers just need to be willing to adapt their selling strategy to match today’s trends. Luckily, at TK Homes, we are constantly watching the market very closely and can help you navigate this ever-changing real estate scene and provide you with the latest strategies to achieve your real estate goals.