August may have produced a seasonally expected slowdown, but the overall news for local homebuyers and sellers remains promising in the Denver area. The August heat ushered in 15% longer days on market for all home types and a slight dip in sales price month-over-month, but homes still managed to appreciate 4% year-over-year.
Survey Says
Longer days on market and slowed appreciation rates can make for sensational headlines and tension in the market. A recent survey conducted by Realtor.com revealed a growing anxiety about the stability of the housing market nation-wide amidst a strong belief (over 50%) that America is on the brink of a recession. Keep in mind those numbers are based on public opinion and not economic indicators which conversely show continued modest growth. But since it's likely on your mind, let's explore the stability of the Denver real estate market.
No Need to Panic
This is not the same market as it was in 2008! If a recession is on the horizon, all signs indicate the housing market won't be the culprit. Risky lending practices are a rarity thanks to stricter regulations implemented for consumer protection since the 2008 housing market crash. Another fact that should comfort Denver buyers and sellers is that our market continues to rank in the top 5 nationwide for price appreciation. This is in part due to Colorado's impressive annual net population growth which has been averaging 1.4-1.8% in recent years. This keeps demand for Denver homes high, while supply remains low.
Buying Power
Recent drops in interest rates are fueling affordability and providing opportunity for buyers across all price points. And even better news? They are projected to remain low for the foreseeable future. That, coupled with the standard cost of living wage increase and more reasonable rates of appreciation amounts to 12.2% more buying power, the highest it's been since 1991! This means you can buy a home with a 12.2% higher sales price for the same mortgage payment. If that's not reason enough to get off the fence about buying a home, keep reading.
A New Pace for the Denver Real Estate Market
As we reported last month, Denver remains a seller's market as evidenced by the low 1.6 months of inventory reported for single family homes in August. It's just not quite as extreme as in recent years where we saw numbers below one month of inventory. This slight reprieve in ourinventory crisis allows buyers time to consider their options instead of rushing into a home purchase, and provides them more options to consider. This new pace is a welcome change for buyers, especially those who are timid about joining in on bidding wars or making rash decisions.
Market Opportunity
The biggest market opportunity to come from the recent statistics presents itself to move-up buyers. Sellers whose homes are priced below Denver's average of $537,024 will still have plenty of interest if priced correctly, while competition dwindles in the higher price points. If you've ever wanted to trade-up, now is the time!
A special thank you to Penny Ritterfor starring in our Denver July Market Report video.
Socials