Prices fell in July, as homes took longer to sell

July brought a mix of good news and challenges for buyers and sellers. The median home price fell last month to $656,000—down 1.4% from last year and about 3% lower than in June. Prices often start to push lower this time of year, but this drop was a little steeper than usual.

The # of new listings hit 4,245 in July—5% higher than last year, but still fewer than in 2019, before the pandemic led to super low supply. The # of active listings is still hitting levels not seen in over a decade: 10,644 homes were on the market in July, just a touch lower than June’s peak of 10,835.

But why?! Homes are taking longer to sell. In July, the average home spent 21 days on the market, over a week longer than last July. Months of supply hit 3.6, giving buyers more choices and more room to negotiate. Not surprisingly, the average sale price is now slightly below the asking price.

Buyer demand is soft; will lower rates help?

“Homes are staying on the market longer… buyers have more options, so they can be choosier. And they’re less aggressive because high interest rates and high prices—plus general economic uncertainty—make the math tough.” - Ben Sprague // The Sunday Morning Post

Though demand is lower than in recent years, mortgage rates are finally improving, and refinance activity has picked up nicely in recent weeks. Rates have hovered around ~6.5% for the past week. This is not because the Fed cut rates (they didn’t) but because long-term bond yields dropped after weaker job numbers and growing bets that the Fed will lower rates later this year.

Notes from the field

Buyers are taking their time to find the right home and are requesting rate buy-downs or credits toward closing costs. Some are re-entering the market as interest rates ease, and we think activity could jump if rates get closer to 6%.

For sellers, strategies such as conducting a pre-inspection, investing in professional staging, and completing larger repairs upfront can help a home stand out—a necessity in a high-inventory market.

I recently helped 1st-time buyers close on a Lakewood home after a 2-year search. They wanted to be near the mountains, downtown, and Red Rocks—and their patience paid off: no bidding wars, seller-paid closing costs, and repairs covered after inspection.

Our neighbor and long-time friend recently sold her long-time family home to downsize and move closer to family. She will be greatly missed in the neighborhood, but we’re thrilled for her next chapter! Here she is in her kitchen, where she found inspiration to write one of her many cookbooks.

What does this mean for you?

• Buyers: More homes to choose from, less competition, and a bit more wiggle room on price.
• Sellers: Price strategically, present your home well, and be ready to negotiate.

So…is now the time to jump in? Or will we see more price softening ahead?

If you’re thinking about a move, let’s talk through your options and make a plan!

Cheers!

-Jen

The Girard Group