For several years now, home sellers have had the upper hand. We all remember the covid market – extremely high buyer demand, homes receiving numerous offers and selling over asking price within days of hitting the market. While the frenzy has slowed down with the help of rising interest rates, sellers still technically hold the advantage for one simple reason: months supply of inventory. This metric sheds light on how many months it would take to sell the current housing inventory based on the current demand of buyers. Six months is the tipping point, anything over that is considered a ‘buyer’s market’. For the past few years, we’ve seen less than two months supply.
But with the impact of rising rates, we now sit at 2.4 months supply across the Denver Metro, with a continuing upward trend across the Front Range. While we’re still far from a true buyer’s market, there are several reasons why buyers have more of an advantage right now.
Countless buyers have decided to sit on the sidelines and wait for rates to come down, so homes are starting to sit longer on average. And while buying right now with higher rates is less attractive, it does open the door for more negotiation with sellers. After all, nobody wants their home sitting on the market. The longer it sits, the more people tend to wonder what’s wrong with the home, especially after one, two, maybe three price reductions. So, buyers have a unique opportunity right now: they have less competition, more homes to choose from, and several ways to get more money from sellers.