A shifting market as 2019 hurls to a close
The Denver real estate market has been changing over the last few years and it appears we’re settling into a new normal as 2020 rapidly approaches.
Real estate inventory is slowly rising, which is tempering home price appreciation and increasing listings’ average days on market before a sale.
For example, the number of Denver metro homes sold through the third quarter 2019 was 5.44 percent higher than in the same period in 2018, according to Denver Metro Association of Realtors data. Over the same period the median price of sold homes rose 2.19 percent, a big drop from the 8.19 percent increase and 8.54 percent increase in this nine-month period in 2017 and 2016, respectively.
As leader of a Cherry Creek-focused team, we are seeing the showing calculus for sellers shift. For example, the number of price reductions are also up year-over-year.
Reevaluating listing strategy
Real estate is always a balance. Agents with their hands on the pulse of the market know exactly how to price a home, what to do make it show at its best and under what conditions to reevaluate strategy. This year’s market conditions are making clear that the latter must shift.
In recent years, for listings priced up to approximately $1.5 million, it was industry practice to reevaluate showing condition or price after 10 showings or 30 days with no promising offers.
Now, we have a much quicker reevaluation trigger. Now it’s time to reassess the listing after two to five showings when a compelling offer is not forthcoming.
The last time Denver Metro sellers had this much competition was in September 2013.
This softening market for you means you have to hit the market at the correct price point with a show-ready house and be willing to make quick price adjustments as needed. The days of overheated bidding wars for most homes in the market are waning.
Moving into the fourth quarter, Sellers should consider looking at the homes that have sold in the last six months and price under them if they want to have a sale by the end of the year.
If you’re planning on listing next year, do it early. Don’t wait for your gardens to pretty up and the snow to melt. U.S. Presidential election years always cramps the buying season — so the earlier you get on the market, the better. Plan to list in late January or early February. Buyer activity really picks up around the Super Bowl.
Buyers shouldn’t wait too long on their target home to make another price reduction. It’s true, buyers have more options now, but I’ve seen many lose the houses they really want, because they were waiting for another adjustment.
I’m telling my buyers to not wait and present a below-list offer if they want the home. This puts them more in the driver’s seat and begins negotiations with sellers who are seeing dampened demand overall.