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Denver Metro Real Estate Market Update

[0:00] is the beginning of October do you know where your home value is well that's what we're going to dig into today because all the September numbers are out right and I get to geek out look at the numbers find out what our home values are doing what activity is like what the showing demand is like um and it's an election year so that means things are already a little bit wild but more important than any of that is that it's the first week of October and you probably only have a handful of days maybe this weekend left to go see fall colors here in Colorado and if you've never seen fall colors here in Colorado I mean this was just us this last weekend it's our anniversary we got married on October 1st and our friends in Silverthorn let us use their place uh every single year um they're amazing people and it was just Prime in Summit County so go if you haven't been out yet go check out the leaves they're remarkable all right so election year stuff is going on we got sky falling from a lot of people that have their house listed right now because showing traffic has fallen off the map unless you are a good home well taken care of with homeowner upgrades the flippers are struggling right now uh with their white and gray themes out there not many people want those houses they'd almost rather have Grandma's house that's impeccable from 60 years ago with laminate countertops and yellow appliances um than they would the flips right now at very top of the market um so let's just dig in let's find out what's going on and as always if you have any questions just drop them down below I'll be happy to get to them so here we go starting with new listings right talking supply and demand stuff here what we're looking at here is a chart of three years in September we actually had less we had 7,700 come to the market versus 8,000 in August now where does that compare to last year so 7700 in 2024 in 2023 we had 6 900 so up 7 800 like that's 10% more 11% more year-over-year in new listings to hit the market okay uh but there's a fun stat so hang with me until we get all through these numbers because I'm going to show you the real time MLS what's going on and there's one number here that is just so wacky that it's throwing all the supply and demand numbers like to the Wayside and helping control what prices are doing right now because prices are holding fairly steady compared to the traffic that we're getting but active listings okay active listings dropped significantly went from 19367 all the way down to 18,300 so a thousand less homes on the market doesn't sound like a lot but that's more than 5% uh month over month now Year over-year we're still up 10% year-over-year September 2024 was 18,300 September 2023 was 16,680 so quite a bit more still active inventory to pick from if you're on the buy side than last year and then we Zoom this out okay so anybody who's ever looked at a stock chart right uh things tend to follow Trends right and everything in the real estate market follows a yearly cyclical Trend more inventory coming into the summer months late spring May June July and then it tapers down and we can see that year-over-year but what's interesting so we can go back and look back from 2010 2011 all the way over here to when we had 25 to 30,000 units on the market the market was just flooded and the sky is falling and everybody was losing their ass in equity um and it just kept dropping kept dropping kept dropping and then we hit this low point in 2021 and 2022 and then we take this big reversal this is what they would call A reversal right where the trend starts going the other way okay and then the trend just follows that so we haven't had this much active inventory 18,300 in September then 2013 so over 10 months right um we just had or 10 years sorry it was a last time we had this much act active inventory on the market okay um so typically what that means is that as more inventory becomes active prices start getting depressed okay pending listings um let's go on here and we'll come back to that in a moment pending listings actually notched up we went from 5700 in August up to 5900 in September August you know July and August are generally tough months anyways uh you know people are out of town and then kids are starting back school again so a lot of people hit the pause button if they got beat up in the spring months okay and then they pull back and they go ah we'll just wait let's get the kids in school let's get our schedules going and then you know comes September will come back in and same thing happened this year is what happens in most years and that activity did pick up a little bit in spring on the number of pending listings okay uh so that's a good thing you know last year what was the what was the peak we actually just kept plummeting last year like a rock um so better than last year um Clos listings though this is this is what's driving everything right now this is what's driving all the headlines out there and this is what's frankly hurting a lot of people in the industry I've never had so many conversations with agents who are finding other gigs right uh there just aren't that many closing so to give you an idea there's 5,000 closed properties in the Denver metro MLS and we're talking the MLS spans just to give you an idea here uh it spans much more than the Denver Market okay so when I zoom this out all these numbers that you see are are properties listed in the Denver metro MLS so it covers most of the Front Range okay um doesn't cover too much East we really start whittling down there's a different MLS out there Colorado Springs has its own MLS but we still have quite a few listed here um and then peblo I don't know if there'll be many in our MLS here yeah just a couple handfuls right um so really it's mostly the Front Range and some of the mountain communities if people have dual access okay um and so when we look at this and see there were 5,000 properties sold in the Denver metro area not including the springs or Pueblo or Fort Collins or Summit County there are over 40,000 licensed real estate agents okay so what does this mean well what this means is that how many less little 12% of Agents had a closing last month okay I'll put myself in that group um thank you very much but that's one out of 10 agents one out of nine agents actually got paid in the month of September like that is nutso to think about and then you got to expand that out because it's not just real estate agents uh that are affected by how many listings get bought and sold it's lenders right lenders are more involved on the buy side obviously than on the sell side um but their business is directly impacted by how many houses people buy then you have photography companies you have staging companies you have videography companies um All Surrounded and all supported by the real estate industry and when there's less closings happening all those Industries struggle right contractors even right this is the last few months is the first time in the last 15 years I've been having contractors come to us um you know normally we have a handful of projects going on a handful of clients that are buying selling needing to fix up their houses stuff like that that we can refer them to and we've got very little work for them right now right and that is all across the board so we're starting to see some correction in contractors and their busyness so prices are getting a little bit better on that side not for some of your specialty trades Plumbing HVAC electrical all those guys are always going to be pricey um but for your standard stuff uh painting Landscaping uh handyman type stuff like the work is being stretched a little bit thin okay so closed listings down uh quite significantly man down from 5,800 down to 5,000 year-over-year we're down almost 5% okay and we've been down for years in the amount of closings happening so again we're just continuing this same pattern here less businesses happening because interest rates are up many people feel stuck in 2 to 3% interest rates and they still don't want to sell even though rates have dropped it's not enough to move the needle enough to double your mortgage payment for the house you want versus the one that you have right just is what it is days in MLS going up as it always does every single year uh January of this year man we went up to 37 um now this is the median actually let's go to the average the average for days on Market is a little bit better uh 42 is the average days on market last year in January or earlier this year in January we peaked out at 52 where were we last year so we're oh last year we were at you 34 so up 24% in days on Market year over year okay month supply of inventory this one was interesting so we have less new listings coming on the market right as we can see in this chart and because of that month supply has dropped we went from 3.7 down to 3.5 months of active inventory u meaning if everyone were to stop putting their house on the market today it would take approximately three and a half months to sell out of every single house on the market it's not how it works in reality but it's just a benchmark number a balanced Market is four to six months of inventory and that's what just kind of the rule of thumb has been for a long time now um so we'll see what we get to over the next few months now heading back to showings I'm keeping the Clos price for the end I know um but it it's it's interesting here uh cuz everything that I've predicted and I don't want to be one of those that toots my own horn but I'm pretty good at predicting the market year over-year uh and what we're going to do historically okay um because you can kind of set your watch to it uh shows to pending this is how many showings it took to go under contract which was 10 now that doesn't sound like a lot but when you couple it with how many showings per listing is happening which is 4.5 that means on average if it takes 10 showings to go under contract it's taking over two months to get your house under contract which lines up with the average days on Market with month supply of inventory those numbers are going up up and up no longer are the days of first weekend 20 offers boom you sold for 50 Grand over the good houses that are well taken care of that are homeowner upgrades that are priced decently right not too aggressive one way or the other are still going on the first weekend okay but that's probably 5% of listings right now but here's what's here's what's going on is that a lot of people have been looking for the last year or two I mean ask me how many clients I have have been looking for more than a year and uh I've got a couple not a ton but a couple and and what happens is is that you're looking you're looking you're looking H this one needs way too much this one needs 250 Grand worth of work Eh this one backs up to a busy road Eh this one's right next to the school and then boom that one comes up and you're like oh you know it it's priced decently it's at 925,000 everything sells between you know 800 to a million in this neighborhood this is awesome and everybody who's been looking for the last year is thinking the same exact thing so that's why you see some of them that's why it's really frustrating is because you have all this stuff to pick from and you don't want it right and I don't blame you uh I don't want the stuff backing up to a busy street either or next to a school or behind commercial space or you know next to a cemetery like and that seems to be the stuff that's sitting active if it is not ideal right now you are struggling to sell okay if you try to overprice and your house is less than perfect um with homeowner upgrades you're struggling right now if you wanted to flip a house and you're putting in the basic Builder grade stuff and it just looks like you're run-of-the-mill flip you're struggling right now people who are winning homeowner upgrades that are priced decently with a very well-maintained home and then you are getting into multiple offer competitive scenarios because everybody is doing the same thing out there okay now what has that done to the closed price well over the last month we have dro dropped we have gone down from 569 th000 down to 560,000 so down 9,000 2% almost month over month um we're down from 585 in June which was the peak which is generally always the peak okay down to 560 585 to 560 in the last few months down 25,000 so more than 5% right what's going to happen the rest of the year well I'll tell you in a second but Eur over year what that means is that from last what September we were at 564 now we're at 560 we're down about 1% year-over-year price-wise and you know so I mean you could have bought a home two years ago and there's a good chance you're flat right you're just break even on it still if you were going to sell it today but after selling costs and stuff you might actually be in the red um so what's going to happen the rest of the year well same thing that happens every single year and we can look at it here now let's get rid of 2022 uh because we went from 600 all the way down to 520 we had a 15% adjustment in 2022 in 2023 we went from 575 down to 535 is the medium price so $440,000 down what's the quick math on that 7even 8% uh within five months okay so June was our Peak here at 585 10,000 more than last year so if we don't get to 535 range like I would be surprised um so I think we're going to continue dropping and being an election year showing activity is generally down you know we'll see what happens but here's here's the good news is that interest rates have started to drop we already got some buyers off the fence right we had about a two- we period in August that was busy lots of stuff was selling quickly and then poof it went it went dead again okay and now the FED Jerome pile talked again and he said hey we're expecting two more rate cuts by the end of 2024 so going from 6% which is where rates are now um likely will'll be at five and a half% by the end of the year and then he said we're on course to potentially make four drops this next year and if they're if they each 25 basis points drops that'll mean by the end of 2025 we'll be at 4.5% but I think what will happen is that prices will start to spike in Spring again I think we will see a strong Spring right so if you're a buyer move now and get off your butts get your pre-approval done and act now from now until about January because February is an awkward month some years it can be crazy busy multiple offers some year it's it's a little bit dead March and April historically are the two best months to be a seller so get your poop in a group if you're a seller and start preparing for February March and April to be on the sell side if you're a buyer that's when you're going to start to hit the breaks unless you have to right I get that sometimes you just have to and there is more inventory that comes on the market but you better be prepared to compete because if rates do keep dropping right you can renegotiate a price and get a price drop 25 50 Grand 100 Grand off sort of stuff depending on your price point um but what you can't do is you can't renegotiate your purchase price after you bought it and what I mean by that is you could buy it today at 6% right if rates drop down to 5% in six months to 12 months well then do a refy on your house at the current purchase price you're at instead of waiting until March or April to buy at 10% higher than we are right now and be with everybody else and then have to have interest rates drop even further down for it to make sense to do a refi at that point right everybody's on the same page with how they kind of look for houses and when they're going to refi so what you want to try to do is be on the opposite side of that right bu when people are hurting and sell when people are you know exuberant about the market okay now we're down month over month on pricing what I want to show you but we're we're not down horribly right we're it's not like we're down down 10 15 20% stuff like that we're down a few percent this year um which is completely normal um what what's interesting here is you know when I go to the MLS right and I look at this all the time is I look in the last two weeks okay what's the activity been like in the last two weeks so in the last two weeks there's been 3,200 new properties to come to the market okay remember that 3200 okay under contract meaning how many properties have gone under contract in the last two weeks 2900 so net 300 more properties coming online than going under contract okay how many closed in the last two weeks 2800 so even less than what is going under contract because lots of stuff falls out of contract now here's where it gets a little nutty withdrawn meaning temporarily removed from the market 50% of properties that are withdrawn today become expired in the next couple of months okay people take it off either want to do some work on it or just let's just reassess we're getting into the holidays here um do we really want to be selling in November December I don't know let's just think about it for a minute in the last two weeks 600 have been withdrawn but that's not even the crazy part the ones that have gone expired 1,400 in the last two weeks 1,400 when expired that's almost half of everything that closed in the last two weeks we closed 2,800 we expired 1,400 yeah half that is a nuto number why well let's go to Redfin and check out some of their stats they're fun they're always good to watch what's going on and what I like to look at is price drops okay how many properties on the market have had price drops uh week over week this is these are these are the motivated sellers okay so the percentage of active listings with price drops this week was 6.6% okay almost 7% of the entire what 18,000 properties that were on the market had a price drop what's that number real quick I don't know a thousand properties um off top of my head had a price drop this week doesn't mean they haven't had one before it just means that they had one last week and so we can see that that number is well ahead of 2022 when we had a large correction uh 2023 well ahead there too and so these are the people that are needing to sell um and I like look at that their stuff a little bit because they pull from just the Denver uh metro area um Let me refresh this here so Denver Metro month supply of in so they're showing 16 weeks so that's a little over four months supply of inventory um which you know would put it in a balanced Market uh the numbers we were just looking at were the entire Front Range this is just Denver proper right uh so as a lot of people are leaving the city you know we are getting more and more inventory so just an interesting thing to watch here right uh you know whereas the new listing median price is up you know the median sales price is down um so people are what that tells me is people are still exuberant about what they think they can get for their house many people are wrong and that lines up with expired listings the number that are going withdrawn uh and you know that's that's just kind of what happens when a market is a bit more balance it takes a long time for sellers to catch up when their house needs work to accept the fact that their house needs work right so again I'm here for you guys if you got any questions you can actually scan this QR code uh you can get in touch with me directly I got a bunch of tools in the description below for you and uh yeah until 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

Denver Showing Traffic

Denver Closed Price

Rest of 2024 Predictions