The Denver home market sales have been doing well, but they seem to be cooling off a bit. In fact, home sales dropped lately at a rate that is on par with when the financial crisis hit in 2008. Is it a problem or is it just an adjustment?
So how badly has the home market dropped?
REColorado, which runs the region’s multiple listing service, reported a 27% drop in closings between the October and November, and sales fell from 4,644 in October to 3,378 in November. The Denver Metro Association of Realtors (DMAR) recorded an even bigger 29.4% drop in homes sold in November. So is that really a problem? Sales in the area always drop this time of year, but this decline was nearly double the average.
37% drop in new listings
Anthony Rael, chairman of DMAR Denver Real Estate Market Trends Committee, said that part of the problem is that sellers were getting greedy and pricing their homes this time of year like sellers were pricing them in May or June. He also pointed out that while REColorado recorded a 37% drop in new listings last month, the last three years also had sharp drops in November that were followed by a better than expected December. He expects the same to happen this year.
Implementation of new mortgage forms and disclosure rules
Another issue that popped up in October that could be part of the lower closing rate is the implementation of new mortgage forms and disclosure rules. These new rules were expected to delay closings, and while there have been delays, they weren’t weeks but days of delays. Many realtors also point out that homes that are priced correctly are still selling. This could end up being a good thing for buyers since sellers will have to adjust their asking prices back to what the market will bear.
What does all this mean?
What Realtors have been saying all along, price your home right and it will sell. There will be inevitable corrections in any real estate markets, Denver is no different. Don’t let the statistics scare you from selling your home or buying a new one.