In the Denver area market, with high interest rates and the length of time that homes are sitting on the market ticking up, pricing homes right comes down to “a science.”

Buyers are being patient, according to the latest Denver Metro Association of Realtors Market Trends report, and the market could continue to slow. The DMAR Market Trends Committee releases reports looking at trends and market activity in the Denver metropolitan area each month.

The September report, covering August sales, found that the median sale price for both single-family homes and condos (multi-family) fell by 1.36% to $582,000 in August, the number of sales dipped 2% to 3,792 and sales volume fell more than 2% to $2.62 billion from July’s numbers. The months of inventory rose nearly 4% to 1.81 months, and the median days in MLS climbed more than 22% to 11 days.

Month over, the number of active listings rose nearly 9% to 6,858, which was a 1.17% year-over-year decrease, and the number of new listings climbed 1.7% to 4,863, a 6.16% decrease from 2022.

“Buyers feel the shift and think that we are no longer in a full-price market,” Libby Levinson-Katz, chair of the DMAR Market Trends Committee and Metro Denver Realtor®, said in a statement. “Median days on market increasing to 11 days may seem benign, but it also means homes are sitting on the market for 70 days or more. As a result, buyers want to negotiate on price and receive a concession for a rate buydown.”

Still, the close-price-to-list-price ratio remains in the 99th percentile, Levinson-Katz said, “showcasing buyers and sellers are coming together to make sales happen without huge negotiation swings.”

Levinson-Katz went on to say that pricing homes in the current market “is a science.” Homes that are priced right or under market can still receive multiple offers. Overpricing a house risks sitting on the market longer.

Sellers are also eager to find buyers with their financing “buttoned up,” she said in comments accompanying the report, recounting one seller of a townhome who watched five potential offers disappear after buyers were scared off by climbing rates. 

The best performing price range for single-family homes and condos was $750,000 to $999,000, which showed a 3% month-over-month increase in sales.

The report showed roughly a month-and-a-half of inventory for single-family homes under $1 million, but two-and-a-half months of inventory for homes above that benchmark. When it comes to homes $2 million and more, inventory climbs to nearly six months.

In August, homes at $1 million or more still saw the most balance in the market, according to the report, which noted supply is increasing while seasonal demand wanes.

“With more than half of the homes over $1 million in the MLS for median days of 13 days or more, an uptick of four days from just last month, the market saw demand slowdown,” Nick DiPasquale, a DMAR Market Trends Committee member, said in a statement. “We expect this to continue and for sellers to start feeling it as early as next month, with a likely decrease of close-price-to-list-price ratio.”

On the national scene, mortgage rates fell slightly last week, but so did mortgage applications, which reached their lowest level in nearly three decades.

Mortgage applications decreased 2.9% last week, according to the Mortgage Bankers Association’s weekly mortgage application survey for the week ending Sept. 1. The 30-year fixed mortgage rate decreased to 7.21% last week. That’s still more than a full percentage point higher than one year ago.

“Mortgage applications declined to the lowest level since December 1996, despite a drop in mortgage rates. Both purchase and refinance applications fell, with the purchase index hitting a 28-year low, as prospective buyers remain on the sidelines due to low housing inventory and elevated mortgage rates,” MBA’s Vice President and Deputy Chief Economist Joel Kan said in a release.

The Market Trends report covers the 11-county metro Denver area, including Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.