One major factor that’s influencing the number of active listings is the number of homeowners who have no interest in selling. They locked in an interest rate over the past two years that was less than half of what we’re seeing now, so the thought of buying at these current mortgage rates is causing them to stay put. At the same time, the dramatic increase in equity over the pandemic is allowing sellers some flexibility. Many can now sell their homes for an excellent return, but they also have enough of a financial cushion that they can offer to buy down the buyer's mortgage rate, or pay for closing costs.
While demand still outweighs supply, the dynamic has clearly shifted, and sellers really do have to put their best foot forward to close at or over the asking price. Also, there are many sellers out there who are still pricing their homes based on the increased market activity over the past two years, and that's causing homes to sit on the market longer as well as an increased amount of price reductions. In the Denver Metro, the percentage of closed-to-list prices dropped below 100% for the first time since the pandemic, and the median days on the market is now 18, both clear signs of this shift.
These changes have forced buyers and sellers to adapt. Our partners at 8z Mortgage are facilitating more mortgage rate buydowns, as well as other creative products like Home Equity Conversion Mortgages. Sellers are offering concessions, and other tactics like paying closing costs, to make their homes more affordable and attractive to buyers. And on the other side of the coin, buyers have a lot more breathing room. They can be more patient now with increased inventory, and more room to negotiate. With so much change, you shouldn’t try to time the market. If you’re ready to make a move, give me a call or shoot me an email, and we can figure out a game plan that works best for you.