Summer 2023 Real Estate Market Update

Summer 2023 Real Estate Market Update

  • Allison Benham
  • 07/13/23

The summer real estate market has been bumping along with both sellers and buyers finding some level of frustration in the market.

Higher interest rates, low inventory, sellers who are feeling stuck in their homes and trapped by their very low current mortgage rates, and buyers who are straddling high home prices and high interest rates all add up to a market that seems to be moving in fits and starts.

Some homes continue to garner multiple offers as buyers compete for what they see as the best deal of the weekend while other attractive homes are sitting and waiting for a while for the right buyer to come along.

At the same time, some buyers feel a sense of frustration as their choices are limited while others seem to breeze in, find a great place, and negotiate a good deal for themselves.

These dynamics are creating a sense of balance in the market as neither sellers nor buyers seem to have the clear upper hand.

So what do the numbers show us? And what is a consumer to take from this?

As of now, the market is still off the highs of last year by about 5-10%, depending on what area and type of home you are considering. As we see and hear from our clients, buyer sentiment and interest in the housing market is still there, but with interest rates now hovering around 7%, many are having a hard time stomaching the higher monthly payments.

In the beginning of this year, interest rates fell and plenty of buyers hopped back in the market. We saw home prices climb as buyer demand surged. As we now enter mid-summer and with interest rates close to 7%, it feels as if momentum has slowed some. It may be that if interest rates persist around or above the 7% mark, we could see downward pressure on home prices.

If you check out the chart below, you can see median sold price is down year over-year in Boulder County. Louisville's numbers look particularly daunting, however keep in mind that those numbers are skewed as we are looking back at data from last year right after the Marshall fire in which Louisville and Superior numbers went off the charts with regard to appreciation and inventory for sale.

Median Closed Price- Boulder County

Median Closed Price- Denver Metro

Median Closed price in the Denver metro remains stronger than up in Boulder County (where again, we are probably seeing a stronger correction in some areas due to the extreme competition last year after the fire.)

The numbers in the metro area continue to cruise along with some areas, Arvada and Westminster in particular, showing a small uptick in median sales price year- over-year.

Median Days on Market continues to remain strong and in Boulder County and down into the Denver metro with all Days on Market numbers being less than 10.

Median Days on Market- Boulder County

Median Days on Market- Denver Metro

Months of Supply remains low in Boulder County. Boulder-proper has higher months of inventory but this to be expected as the homes in the upper price ranges tend to sit longer in Boulder in contrast to the lower priced homes in the rest of the county. It is common to see Months of Inventory in Boulder be higher than elsewhere.

Months Supply of Homes for Sale- Boulder County

Months Supply of Homes for Sale in the Denver metro remains really low. These numbers illustrate the predicament of sellers being hesitant to list their homes due to the higher interest rate they will have to take on if they move. This hesitancy creates an inventory shortage for buyers and that plays out in the numbers.

Months Supply of Homes for Sale- Denver Metro

So what is our conclusion on where we go from here?

With buyers and sellers both feeling a bit of a burn, there are opportunities being created in the market. For buyers this is first opportunity in many years where you could find a home you like and submit an offer without competing with other buyers. And for sellers, there is a pool (albeit somewhat smaller than in prior years) of ready and willing buyers, as long as the home is in good condition and the price is right, to still maintain the majority of gains that you've achieved of the past 10 years.

Both sides should prepare as necessary.

Loan pre-approval is still a must for buyers, maybe even more so than in past years. Given the anxiety created by higher interest rates, Sellers are looking for certainty that buyer's financing is in order before agreeing to a contract. We are seeing higher number of buyers this year drop out of contract due to financing issues. Once you have sound financing in place, there is a good chance you can get a seller to throw in some extra goodies during negotiations.

For sellers planning to list in the coming months, other homes that you'll be competing with will be raising their game to compete for a smaller buyer pool. Completing home projects to prepare a home for sale, staging, and making sure a home shines in comparison to the competition once it hits the market are becoming more critical as we move into the second half of the year.

If you have questions about navigating a tricky market, we'd be happy to help. Don't hesitate to reach out and let's chat!

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