As the Denver real estate market continues to evolve and change with the weather, the question on everyone’s mind is whether or not we are in a buyer’s market. Traditionally, a market with less than three months of inventory is considered a seller’s market. In direct relation to that, a market with more than six months of inventory is considered a buyer’s market, meaning three to six months of inventory is defined as a balanced market. These benchmarks help define the Denver Metro current market, which is notably changing.

Currently, the $100,000 to $199,999 and $1 million and over segments for detached homes are pushing the three percent threshold, with 2.75 percent and 2.62 percent, respectively. In addition, the $1 million and over the component for attached homes is at 2.83 months of inventory. Using months of stock as a metric indicates that Denver Metro is moving toward a balanced market.

Buyers can now take time to find the right house and negotiate the purchase price, inspection-related repairs, and appraisal values. While interest rates are higher than at the beginning of the year, some buyers are accustomed to the increased speeds and are utilizing available marketplace tools. However, for many sellers, it likely feels like the rug has been pulled out from underneath them. Price reductions are rising, while active listings at month end rose 10.72 percent to 7,683. Pending sales declined 15.41 percent for detached and attached homes month-over-month, directly related to a 6.38 percent decline in sales volume month-over-month.

“I believe we are moving toward a balanced market, which we haven’t seen in over 16 years,” commented Libby Levinson-Katz, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “A traditional cycle for the Denver real estate market is seven years. Due to an economic crash and a global pandemic, the cycles were extended, but a correction is needed. As a result, the market is entering a period of neutrality where the bullish ways of extreme markets make way for a stage of compromise, with buyers and sellers working together for a win-win experience.”