Is the Colorado seller’s market softening? That’s the question we’ve heard a lot since the start of 2019. According to Forbes, Denver is the most competitive housing market in the nation. The Denver metro area is in a compression phase of the housing cycle, meaning there are far fewer homes for sale than buyers looking to buy. Expect this compression to continue and prices to rise through June if the cycle is anything like years passed, and starting in July, we will see buyer fatigue and inventory hit an annual high.
This “compression” of the housing cycle has been consistent for the last 3 to 4 years, and the spring market which starts as early as February has consistently seen homes listed at their highest price. Yet experts agree that the market is softening for buyers, which is evident as active listings experience longer days on market than in year’s past.
This spring we’ve seen a drop in the amount of multiple offers on desirable properties, but hot properties are still often selling for over list price. And the predicted hold on interest rates and continuing lack of inventory still give sellers a bit of leverage.
The current market seems to offer advantages to both buyers and sellers. Here’s a few things to consider:
1. Home pricing may not increase to levels of past spring markets.
The last few years have seen a continued increase in home prices, especially during the busy spring months of March, April, and May. This year price growth is likely to slow down and may return to price levels seen in the fall of 2018.
2. A lack of bidding wars.
It seems the days of sight-unseen offers and crazy bidding wars are on the decline. With the exception of highly desirable properties in hot destination neighborhoods, most buyers will enjoy a slower-paced market and a little more leverage than in years past.
3. Sellers may be making concessions.
The continued price increases have created buyer fatigue and that means sellers need to get creative in order to generate more interest. These could include offering cash concessions for property updating or limiting the rent-backs and allowing buyers to take possession sooner.
4. Continued influx of new buyers.
The strong job market and gradual decline in mortgage rates will continue to usher in housing demand in 2019. Denver has become a magnet for millennial migration in the years post the last recession, and corporate relocation continues to produce new buyers looking for available homes.
Whether you hope to buy or sell this year, having a knowledgeable and experienced broker on your side is the best bet to get the results you want. Please let us know what your needs are and how we can help. Know that we work strictly by referral, it would be so appreciated if you pass on our names to anyone you know looking to buy or sell a home.
(Data from March 2019 DMAR Market Trends Report)