Metro Denver has moved solidly into the buyer’s camp, with home sellers outnumbering buyers by a widening margin, according to a report Thursday from Redfin, a Seattle-based residential real estate brokerage firm.
Nationally, there were an estimated 1.9 million home sellers in the U.S. housing market and an estimated 1.5 million homebuyers in April, according to Redfin, which works out to a 33.7% advantage to buyers. Metro Denver had 16,357 sellers active in April, compared to 11,526 buyers, giving Denver a 42% ratio in favor of buyers.
Nationally, 32 markets of the 50 examined were in the buyer’s camp. Denver ranked 19th, sandwiched between Los Angeles and Anaheim.
“At no other point in records dating back to 2013 have sellers outnumbered buyers by this large of a number or percentage. A year ago, sellers outnumbered buyers by just 6.5%, and two years ago, buyers outnumbered sellers,” noted Lily Katz and Asad Khan, authors of the report.
Cooper Thayer, a Realtor with The Thayer Group Keller Williams Action Realty in Castle Rock, said May’s numbers will provide more clarity when they come out in early June, but added he would “definitely agree” that metro Denver is now a buyer’s market.
“The ratio of buyers to sellers is skewed, and with more listings on the market, the smaller buyer pool holds even more leverage as sellers compete for attention,” he said in an email.
Sellers face the most pressure in southern Florida. In Miami, sellers outnumber buyers three-to-one, and West Palm Beach and Fort Lauderdale aren’t too far behind. Austin, Texas, is another glutted market, with sellers outnumbering buyers by 124%. And in Phoenix, there are twice as many sellers as buyers.
One contributor to Florida’s lopsidedness is a heavier preponderance of condos, which have seen a surge in insurance premiums and HOA dues following more severe storms and the collapse of the Surfside condo in July 2021, which killed 98 people, including Colorado resident Cassondra Stratton.
Florida also experienced a surge in population following the pandemic, which temporarily boosted demand and helped push up real estate prices. Some of those newbies, as well as longtime Canadian snowbirds, are wanting out.
Nationally, the condo market is the segment that has swung most solidly in favor of buyers, with 259,137 sellers vs. 141,223 buyers last month — an 83.5% overrepresentation by sellers, Katz and Kahn said in their report. For single-family homes, the seller overrepresentation is 27.8% and for townhomes, it is 33%.
Prices still aren’t falling in most markets that have tilted in favor of buyers, but if current trends hold and mortgage rates don’t fall and reignite buyer demand, then it is likely only a matter of time.
Redfin estimates that the median price of a home sold in metro Denver is down 0.1% over the past year, compared to a 1.6% gain nationally. Although it doesn’t have a forecast for Denver, it predicts home prices nationally will drop 1% this year and is advising sellers in Colorado and elsewhere to get moving before they lose the bargaining power they have left.
“Inventory is piling up as buyers are pulling back due to high costs and ongoing economic uncertainty. Prices are already starting to drop slightly with the median sale price down 0.1% compared to a year ago and likely to fall more by year-end,” predicted Chen Zhao, Redfin’s head of economic research.
Denver’s home price decline could be a rounding error, but it could also represent a tipping point. Zillow, which had predicted home price gains averaging 0.1% for metro Denver at the start of the year, now predicts they will fall 0.9% by next April.
But Zillow, in a report published Thursday, also shows above-average demand still at play in metro Denver. Listings in March had 6.2 engaged buyers in Denver compared to 5.5 nationally. About 32% of homes sell above the list price in Denver compared to only 27% nationally. Half of listings go under contract within 11 days compared to 17 days required nationally.
And the inventory of homes listed for sale in metro Denver remains below the historical averages going back to 1985, according to the Denver Metro Association of Realtors. But that gap is closing rapidly.
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