All Forum Posts by: Tom McDermott

@Tom McDermott, this is great info to reference. Thank you for looking this up. Since 2019, would have thought population growth would have been large than what the data shows. 

@Tom McDermott This is a great question to ask! 

One of many reasons you will see a prices drop, in the Denver Metro Area to be specific, is because houses are not getting multiple offers the first weekend they are listed. When a seller sees that, there may be a little panic going through their mind so the knee jerk reaction is to drop the price +/- $25k. This creates an amazing opportunities for buyers. To name a few:

-Buyers have been hurting to get more inventory, now it is available!

-Buyers have not been able to get contingent offers accepted, now sellers will accept these!

-Buyers have been frustrated with $50K appraisal gaps, now this is no longer necessary; in fact, use that appraisal gap to make a larger down payment and your monthly payment may not be as impacted by higher rates as you thought.

With all of this being said, rents are still very strong.

@James Carlson great summary and thank you for sharing those stats. Love geeking out with the numbers. But you mentioned supply is up for SFH listings 119% year over year. That is excellent news but I still think historically we (Denver) are still experiencing a huge housing inventory shortage. Some more numbers to geek out on.

Over the past decade I think everyone can agree Denver has experienced strong population growth. However, almost no additional inventory from new home builders. Numbers below are in the millions. (Thank you Lon Welsh for the data)

1970-79= 26 M

1980-89= 25 M

1990-99= 27 M

2000-09= 27 M

2010-19= 5.8 M

@Tom McDermott

You're not alone. The price drops are happening everywhere. And Denver's no exception. I had three listings in the last month that went for under asking price. And none of my buyer clients -- be it Airbnb or STR investors who we mainly work with or plain jain owner-occupants -- have had to pay asking price in the last month and a half.

You ask about the seller's mindset. Yeah, if they have a good agent, the seller knows they don't have as much power anymore. We're getting concessions either in the form of seller-paid closing costs, priced reductions and also just repairs done. Gone are the days of taking it as-is.

A few interesting stats from the latest Denver Metro Association of Realtors' July report (with data only up through end of June):

-- SFH listings are up 119% year over year. That's a lot more supply on the market. (It's up 65% just over the previous month!)

-- # of closed transactions is down 25% year over year.

-- Days on market for SFHs is up 25% year over year and 11% up just over the previous month.

-- Median price for SFHs is up 12% over last year (but only 0.5% over last month)

I'm seeing similar trends in Colorado Springs, where we also work:

-- Active SFH listings are up 173% over last year

-- # of deals is down 5.7%

-- and yet, the median home price is up 10% (or $495,000, a new record)

What does this all mean? It's a mixed bag. Supply is up, which is good, but prices still saw double digit appreciation year over year. Denver's real estate market and Colorado Springs' real estate market, like everywhere else, is finally cooling off a bit. Rising interest rates have made a big dent in demand. Is it dropping off a cliff? No. I think things will continue to cool and we'll continue to see some price drops, but we're not crashing.

As just one example ... we have 6,000 or so active listings at the end of June. That's about triple what it was last year, so the supply is increasing, which helps with prices. (Great!) But that supply number is roughly the same as it was April of 2020 and April of 2019 and April of 2018. And no one was talking about those markets as soft. 

So, again, it's a mixed bag. We might see prices level for a bit, maybe some will even decrease, but I suspect interest rates will go down in 2023 and with that will come an increase in demand again.

That's my take anyway. What do others think?

We're seeing a lot of price reductions in CO and listings staying on the market a lot longer than this time last year. I agree, this is the time to get creative and see if the seller would be interested in seller financing at a lower rate than market.

I've seen a number of prices drop here in Denver over the last quarter or so. We are definitely seeing the market soften. Time will tell how things play out.