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Denver Metro Real Estate Market Update

[0:00] home prices are shifting fast interest rates have everybody on edge and a bit nervous and there's one shocking Trend that's going on right now in our Denver real estate market that if you're thinking of buying or selling in 2025 coming up you really need to pay attention to and we're going to go over all of that here in our December monthly update it's beginning of the month it's my favorite time of month where we get to geek out on what the numbers are doing because I love to look at the headlines and then completely ignore them because I'm looking at statistics on what's actually going on in our Denver market so welcome we're going to just dig right into it and find out what's going on with your biggest asset your home and if you want to know your current home's value just go down Link in the description below uh you can just click on an automated home valuation and kind of keep track of what's going on let's just go right into it so what we have here starting with supply and demand as we always do right new listings inventory is the driving force all we've been hearing out there right is that there's more stuff on the market right now which are driving prices down blah blah BL blah blah blah well there it's kind of a tale of two stories here um there is more inventory right now but we also have sellers kind of stuck on their price which is balancing things out this is the most balanced Market I've ever been in since 2010 since I started this business right so new listings this is what's interesting we're looking at a five-year chart here okay um it's just like a heartbeat all these numbers just are seasonally uh we hit highs and lows on close price and the amount of listings and all that Now new listings are down to 4,731 new coming on the market I mean that's that's a significant drop month over month from 7,800 down to 4700 month over month December's usually the low we can go back and look at last year December was the low then uh the year before December was the low in 2022 so we're on the same exact Trend Now year-over-year new listings is only up by 2.5% so essentially flat right flat on new listings year-over-year which is a good thing kind of means we're balanced compared to last year for new listings but active listings is where we have the biggest change right so we're at 17,500 for the entire Denver metro area okay this is including all the surrounding suburbs of Denver metro area um and so it's quite a bit more than just Denver proper 17,500 compared to last year is up 23.5% so last year we had 14,140 this year we have 17,46 7 that's a significant jump ladies and gentlemen like 23% more in most any Market anytime you have that much more inventory you're going to have suppression of prices but again I'm going to get back to this I'm going to show you some interesting stats here in a few uh that that make us all kind of shake our heads and go what the heck is going on equally as crazy as the FED dropping rate and interest rates actually going up like I I don't know this is this is where I even get confused as to what's going on someone with some Financial degree and economics or something could probably tell me why they could probably make up a bunch of stories but uh yeah we know everything's just a little weird feeling out there right now okay that's the best way to describe it so new listings same active listings way up from year-over-year but dropped well month over month meaning stuff's going under contract but pending listings is dropped month over month but again it is up 23% year-over-year last year we had 4, 4100 go under contract in November this year we had over 5,000 significant jump so active listings is up by 23% but so is pending listings so what that's telling me is that the inventory out there is getting absorbed okay whether that's properties being withdrawn or expired off the market which is a big part of it uh it just tells me that things are getting absorbed back into the market the market is doing what it's supposed to do okay closed listings down month over month as is normal went down from 6,000 month over month to 5100 but again we're up 11.3% year over-year last year we had 4600 close in November this year we had 5,100 like again that's a good thing like this tells me that people are kind of tired of waiting or they've waited for a couple of years realize that interest rates aren't going down inventory isn't flooding the market therefore suppressing prices even more like we're seeing small corrections but it's in micro markets right the condo inventory out there right now is having an adjustment but it's starting to get absorbed by the market since the election is over um town homes are struggling a little bit same with condos single family you know there's two different segments there's the stuff that everybody wants which is in the middle of the neighborhood homeowner upgrade things like that flip properties are struggling as our rentals that are selling are struggling right stuff that needs fully updated um and so there is some opportunity there right if you're a first-time home buyer you're on a budget uh which heck we're all on a budget right now um you know it's it's an opportunity there with some of these categories of houses that are sitting there right um and if you want any advice on that give me a call my phone numberers down below um by all means I'm happy to chat with you about it now getting back here to days in the MLS okay we're going to look at the average I like that more than the median here um up to 54 days on Market how does that match up to last year well last year was 45 so up by 20% but that's that's not crazy I mean nine more days on the market on average but if you're going to sell your house expect two months on the market depending on how you're priced if you're pushing the price expect that to be 4 to 6 months of being on the market or more um appropriately priced you're still sitting there for two months before going under contract and then you have another 30 days to close this is not 2021 or 2020 where things flew off the shelf you're going to close in three to four weeks move on with your life you have to plan appropriately these days if you're a seller okay all right month supply of inventory Drop Like a Rock went from 3.6 months down to 3 months that's still up 20% year-over-year last year year we had approximately 2.5 months of inventory this year we've got three months of inventory okay so what this means is if no new properties would come on the market today uh how long would it take to sell out of every single property now we know that that's not a reality but it's just a benchmark number normal average buyer sellers Market that's just that's balanced is supposed to be four to six months I think this Benchmark number has changed I think think that it's no longer the norm to be balanced at four to 6 months I actually think it's more like 3 to four months why because we're no longer moving every five to seven years I mean I don't know what the average time is that someone lives in a house but I'm guessing it's well over 10 years now so people are moving less as Things become more and more expensive um and properties are being handed down and no one's selling unless they have to you don't have many of those move up lateral mover buyers even downsizing buyers right we don't have a whole lot of them and so I think that's skewing the numbers I think we're looking for four to six months as a balance Market I don't think that's the case I think this is as balanced as we get I think if we get north of four months of inventory I think it turns into a more extreme buyers Market but given the time of year we're not going that way inventory is going to continue to decrease over the next four to six months approximately uh four to five months and then it's going to start ramping up again coming in to June okay um so time things properly if you're on the sell side March and April are your two best friends if you're a buyer now is your time not a month from now not two months from now now okay now don't call me in 45 to 60 days and say hey I'm ready to buy a house well you better be ready to compete again okay that's the long and short of it um but enough with the lecture so let's get back to the numbers here um all right this is where we're going to divert and I'm going to show you some interesting stuff um percentage of closed to list price I normally don't pay any attention to this okay because what this says is that in November of 2024 property sold within 0.8% okay less than 1% of list price to close price what does that mean if you were listed for 500,000 you sold north of 495,000 okay what they don't don't tell you about this number and you can obviously see this Spike back in 2022 like 104% you know of list price everything was selling for 4 and a half% above what they don't tell you is that this is based off of the current list price not the original list price so you could have been listed for 500,000 and if you did a price drop down to 450 and then you sold at 445 you're still within that 1% roughly right uh 446 okay uh but that doesn't account for the $50,000 price drop you made before going under contract so this number is kind of BS that's why I don't normally pay attention to it but what it combines with here uh is something really interesting so going on to Red Fin's data center right um I like their stuff I looked up Denver Colorado and I wanted to see what price drops looked like okay now it's not uncommon to have a lot more price drops in the winter months than the summer months it's just cyclically what happens but we go back so let let's take a look August of 2022 this is a few months after interest rates started to go up April was the peak of 2022 August 2022 the percentage of active listings with price drops meaning everything on the market that have had a price drop was over 57% in August of 2022 okay that's how fast prices started to have to drop to adjust for the interest rate Spike right and so year-over-year in the uh late winter months you know we're talking December January February March um it tends to be the lowest time for Price drops okay this is the least amount of inventory on the market most people understand that the winter is a little bit slower and so they're a little bit slower to you know they're just not as motivated right during the winter months to sell um and we had 32% of all inventory on the market had a price drop back in 2023 in December we had 21% right so what was it in November 38% was last November of the amount of active listing that went on the market that had a price drop okay almost half and this year so far in October we were at 46% so I would expect this number to keep on climbing based on its current Trend although it should be going down but it's not so let's look at this number so half of everything that's on the market has had a price drop right and on top of that everything has sold for about 1% less than its current list price so that means that everything is selling for significantly less I mean what's the average price of a price drop right our median sales price here is in the 600s approximately um in Denver proper uh so if you've done a 5% price drop right because you haven't sold in 30 60 90 days and then you have an additional 1% like if you went on at 600,000 there's a good chance you're closing at less than 540 okay keep that in mind that is a big number that is a big change that the these stats don't reflect okay um and it's primarily due to mortgage rates right mortgage rates since they announced they were dropping rates back in September we were at 6% and we're all the way up at 6.7% right now like like I said I don't 100% understand it um someone much smarter than me probably has a good reason why and I understand the you know mechanics of it and bonds being bid on and that drives up the interest rates on it but in reality we hear rates are dropping and then they do the exact opposite like that doesn't exactly exude conf confidence so it's exacerbated the people who are on the fence and they're staying on the fence right um at least a lot of people are so something else I wanted to show you and I'm not going to pick on a listing agent here okay I promise you this is likely not their fault this is what many of us are experiencing with sellers right now is that there's a number in their head that they heard once upon a time or Zillow told them once upon a time their house was worth and that number has not left here's why okay so a little bit of of psychology right um when I used to work with car dealers okay I wasn't a car dealer myself I wasn't a car salesman I sold software to car dealers okay um so I was trying to take money from the sharkiest of the Sharks out there my apologies if you're a car salesman you are very much needed but that profession has a stigma for a reason just like real estate right we've all got our things um but once someone has a car in their driveway so big old tactic was take a test drive go ahead take it home for the night just you know Brak it back tomorrow no big deal right once that car is in their driveway it is theirs mentally okay well the same thing happens when Zillow tells you your house is worth x amount of dollars you start instantly deducing deducting what your current mortgage is how many fees you would have to pay potential taxes all that and then you have this bulk of money sitting left over that since you've owned the property for the last 20 years and that dollar left over is that number in your head as a seller okay that's where you want to get to you don't care about anything else you don't care about the feelings you don't care about the opinions of anybody other than you heard your house was worth this at one point or your neighbor sold at one point for X they got 100 Grand over for their property and now that is what yours is worth um and then they just make that their list price not currently based on what the market is actually doing now maybe they don't need to sell right but they would like to to advance their personal life for whatever reason and we're seeing this all over the place um and it's it's getting challenging to work with to say the least so I can look at this property here in Denver on Filmore and I can see an originalist price of 1.8 and now they're down to 1.6 that's $200,000 price drop more than 10% since they went live in July of 2024 okay a few months on the market um yeah four months on the market um so that's a significant price drop then what you have a hard time seeing is what the true history of it is okay so this property had looks like it's been a rental before they had it up for lease in 2020 they got it leased out and then they put it on the market July of 2023 for $2.3 million okay 3 months later it was withdrawn off the market then nine months later they went back active on the market at 2.3 and then they did a price drop a few days later down 400,000 then 10 days later they dropped 100,000 then what a month later they dropped down another 200,000 they went under contract then they went back on the market then they had a second listing here probably through uh a different MLS expired withdrawn expired active withdrawn and then they tried it again in July of this year starting at 1.9 then going down to 1.8 then down to 1.6 they've been trying to sell this property for a year in a few months now okay so this is not uncommon of what we're seeing out there uh so I don't know I you know I don't know if there's any exact advice I can give you um if you're on the buy side uh other than a lot of sellers right now they don't need to sell and so they don't need to play ball with you right if you think that house was worth a million dollars put in your offer right but know that there's a very very small chance of uh that getting accepted I'm not saying that house is worth a million dollars I'm just giving you example um but most buyers just just kind of walk away from it because they believe that even if they get it under contract what if there's stuff that comes up on the inspection right um you know what are the chances that the seller going to work with you it seems like they're unrealistic and so it's going to be a challenge to drag everybody through that entire process right most buyers don't want to go through that um that's the interesting number is that there's been 50% of properties on the market have had a price drop and of those they're selling for another 1% less uh but that house there that started at 2.3 if they end up selling at their current ask price it's going to show that they sold at their current ask price so the numbers are just kind of you know a little bit made up you got to know how to navigate through them um so showings right this is another important one to to set your expectations on what's going on with the market okay so with our current showings we have uh until you go under contract almost 16 you have to show your household almost 16 times to go under contract like that's a fairly High number and then the amount of showings per listing right now is at 4.3 per month per listing some are obviously getting less some are getting more and it averages out but on average that means you're kind of on the market for about four months if you're trying to push price even just a little bit okay it's got to be priced properly if you want to sell within the first two months okay now on to the closed price which everybody wants to know closed pric is interesting we are flat month over month doesn't usually happen in October we're usually sinking like a rock this time of year okay um that happens virtually every year we have about a 5 to 10% adjustment down from about July August until about the end of January okay so we're at about the bottom of the dip if things remain stable over the next 60 days right we're likely going to rock it up and break the 2022 median price of 90 okay so just keep that in mind if you're on the buy side your time is now if you're on the sell side like waiting a couple of months might not be a bad idea and shooting for end of February till just the very beginning of May um is your best time to be a seller uh so if you want to know what your home is exactly worth again you go down in the description below there's a link for your home value if you want to get in touch with me uh you got my cell phone down there you've also got this QR code that you can scan get directly in touch with me schedule a call um and if you want to see what happened last month to kind of you know keep track of all this stuff just go ahead watch this video here here and yeah keep informed about what the Denver Market is doing hope you're well till the next time happy housing

Denver New Listings

Denver Active Listings

Denver Pending Listings

Denver Closed Listings

Denver Days on Market

Denver Months Supply of Inventory

SHOCKING Stats

Denver Showing Traffic

Denver Closed Price