Even though we saw 1.27% appreciation last month, we are currently in as close to a buyer’s market as we've seen since 2019. Home appreciation is a lagging indicator of activity because it takes 21-30 days to close on a home. A more current indicator is the ratio between active listings and pending homes. New listings are up 21.1% whereas pending sales are only up 8.3%. This has caused the number of active listings on the market to increase by 1,141. This shift started to occur ~3 weeks ago and has given buyers larger negotiating power.
Will this inventory cause a collapse to the market? I doubt it. US News & World Report just ranked the Denver Metro the hottest housing market in the country for the second year in a row. Here is a link to the article which is an interesting read because it highlights the demand, supply, and financial metrics of the Denver Metro housing market specifically.
Another leading indicator that our real estate market is safe is investor behavior. The share of U.S. home investors recently hit a new high, eclipsing the previous all-time high of 28.3 percent from February 2022. Most of the investors that we work with know that if they can find a property that breaks even now, then they will see large cash flow if/when they have the opportunity to refinance at a lower rate.
TLDR: For the first time all year, buyers have the advantage in negotiations. We can use that to get 2-1 buydowns to reduce your interest rate while maintaining the optionality to refinance in the future. Sellers, the market slowed down earlier this year than normal. The sooner you list, the better off you will be.
