Market Update:
We’ve officially hit break-even territory with 0.7% appreciation year over year. It is not the most exciting headline, but all things considered, that’s a win. We’re flat, not falling, and with everything else going on in the economy, stability is a form of strength.
Breaking this down, buyer activity is up. Pending home sales are up 40.8% month over month and 14.1% year over year. There are more buyers; however, the number of buyers still cannot keep up with the number of sellers. Active listings are up 66.9% compared to this time last year - a massive inventory swing which will likely lead to depreciation at some point.
One area to highlight is the new build space. Inventory for new construction homes has reached a 15-year high, and builders are very motivated to offload homes. Lennar, for example, is now offering incentives totaling 13% of the home’s sale price. To put that in perspective, back in 2022 they were offering just 1.5%. If you’re a buyer, this is where some of the best deals may be hiding right now.
The broader economy remains the wildcard. Tariffs, stock market volatility, and overall uncertainty have made some buyers hesitant, and there are even talks of a looming recession. Many people associate recessions with falling home prices—largely because of what happened in 2008. However, it’s important to remember that the 2008 recession was caused by the housing market. In most other recessions, Denver Metro home prices have actually increased. This is often driven by the Federal Reserve lowering interest rates to stimulate the economy, which in turn boosts buyer demand by improving affordability.
Too Long, Didn’t Read:
Buyers: There are good houses that are going for $100k over asking price, and not quite as good of houses where negotiations are possible. Depending on your criteria, it may make sense to get a better deal on a 7/10 home than compete in multiple offers for the 10/10 homes.
Sellers: Yes, more buyers are out shopping—but with inventory skyrocketing, you’ve got competition. Price strategically, present well, and be open to working with buyers when they do make an offer.
