Why Sellers Are Giving Up | Denver Real Estate Market Update

Why are so many Denver home sellers just throwing in the towel right now? Expired listings are piling up, homes are being pulled off the market, and frustrated sellers are walking away instead of cutting their prices. In this market update, I'll break down the numbers behind this trend, what's really driving sellers to quit, and how this shift changes your strategy, whether you're buying or selling in Denver this fall. If you're new here, my name is Landon. I'm a local realtor here in Denver, and I help people find the right home in the right neighborhood. Whether you're buying your first place or your forever one. And before we dive into the details, let's zoom out and let's look at what's really happening across the Denver market. The sellers really are giving up right now in the market. We're seeing crazy numbers of expired listings. And keep in mind, listings that hit the market six months ago, which is your average listing agreement timeframe, those homes listed, if we're end of September right now, those homes we're listing end of March, leading into the spring season. So these were listings that were very hopeful, that were nailing the timing, that now, after six months, they're expiring and going off the market in many cases. And so we had 333 expired listings just last week. Our average number weekly is about 138, which gives you about a five to 600 listing average of expires during the course of the year. And so 333, that's a big number. That's more than double what you would expect to see this time of year. So that is very telling. And it just tells me that in a lot of cases, sellers have had it. Now they're deciding, you know what? I'm just gonna take my home off the market because the pain points are just too much right now. And I'm gonna wait and hold out through the holidays and then try again next year. Also, 35% of all listings in the Denver area sat for 60 plus days without any offers. So that's a crazy high number. You know, just over a third of our listings are sitting for 60 days or over. So it's literally, you know, two thirds of the market is pricing their home correctly, winning the beauty contest and still doing pretty well and selling on an average timeframe. And then you've got one third that's dragging up the days on market because they're not prepping their home for sale and they're not pricing it correctly. And so those are the two magic ingredients, right? And it's the kiss of death if you don't do those things. Now, home sitting for that kind of timeframe is not abnormal in the entire country. 44% nationally of all listings in April during the prime season sat for two plus months. So that one doesn't blow me away, but the number of expires that we're seeing, that's definitely, you know, out of category for what we normally see this time of year. So what are sellers doing right now? You know, if they are pulling their home off the market, many of them are looking to rent, which actually is even a colder market than the buying market right now. I've talked to several property managers who are saying that this time of year has been one of the hardest that they've seen as far as finding renters and keeping them in place right now. And so that is, you know, probably not the solution. If you're a seller who hasn't been able to sell over these last six months, the solution is probably re-strategize and take a different approach, you know, this time around. And one of the things that you should know is if you are switching to a different agent, you can start with brand new days on market counts. So zero days on market if you switch brokerages. Also, if you stay with your current agent and you just take your home off the market, expire it for 31 days, you can come back on as a brand new listing. So both of those approaches could be a better approach than just trying to hit the rental market and rent your home out in probably one of the most challenging rental markets we've seen in the last 20 years. And one of the leading causes of sellers having so much frustration and having to give up and take their home off the market has been that our inventory counts, you know, reach 14,000 plus here in the seven county Denver metro area. And when that happened in July, that was a 14 year high on inventory. So hadn't seen those numbers since the great recession. And just last year in the springtime, we had 6,000 homes on the market. That was up to 14,000. So you can imagine, you know, if buyers have that many more options to choose from, and there's still a smaller number of buyers out there, then sellers are feeling that and they're seeing it in a big way. And sellers are tired of sitting for 150 days with no traction, no showings, and no offers. Instead of chasing the market down with price cuts, many are just pulling the plug. And what's different this time is the psychology. In 2021 and 2022, sellers had all the leverage. Homes barely lasted a weekend because of the low inventory. And now the opposite is true. Buyers have options, and sellers who don't adapt quickly are left behind. But why exactly are sellers giving up? Let's look at the biggest pressure points pushing them out of the market. So you may be asking yourself, how are sellers still mispricing homes, right? And pricing homes too high. It's a conundrum, but it comes from a couple places, okay? Understand that average price is a lagging indicator. And so we may be seeing some of the year-to-date stats, but they're not really factoring in until some of these homes close from, they were listed in July and August, right? During that summer low period that I've told you about. And so the homes that sell and close during those periods will probably reflect more of a price drop. And so that's why some sellers get misled. They're looking at comps in March, April, May. And I literally just did a market analysis on a townhouse last week. And I saw that there were three comps that had sold in March and April for 365, 360, and I think one was even 375. And then all the comps that had sold in July, August in this community, very similar units, had sold for 295, 299, and 299. And so if you're looking at the average of the last six months, then you'd say, okay, let's price it at 330. And you would probably sit for a while. And so we've decided to follow the trend of what's going on, right? And base our pricing on what's happened in the last couple months. And then if we get surprised, then great, right? But pricing on the more aggressive side is the better way to go. But that's not how it's happening for many sellers and many listing agents. They're not being coached very well, and they're pricing their homes higher than they need to. Also, the other thing that's driving all these pricing gaps is that luxury pricing is driving our average price. So if you're just looking at average price, you should know that since 2022, we've actually gone up in average price. It's up 1% since then. And so if you're looking at that, it can be misleading because the luxury market has done very well this year. And the luxury market is actually driving price up because of the volume of sales that are going on and are comparative to the volume of sales that are happening below a million. Also, you may ask, how is new construction affecting all of this, right? And we're actually not seeing huge numbers, you guys, of new builds in the market right now. So back in 2023, we had 20,600 housing permits pulled for new construction homes. That's a ton of new construction, right? In 2024, we actually went down to about 16,000 new housing permits pulled. In 2025, there's not enough data yet to really determine, but as of first quarter numbers, we were about 30% behind the numbers for 2024. So we're actually going down every year as far as the number of housing permits that are being pulled for new construction. But 2023, they built a ton of homes based on their projections from the 2020, 21, 22 numbers that they were looking at. And so that wave of activity, we're still trying to catch up from a volume standpoint, and that's absolutely driving some of the equation right now. And these new builds, you guys, they're pricing fairly well right now and continuing to adjust on prices as they need to. And they're also offering these low fixed rates. So anytime you see a 3.99 fixed or 4.5 fixed, that's something that buyers gravitate to because they're thinking, man, where else am I gonna find a rate that low right now in the market when rates as of today are about 6.37? And so 2% lower, that's on average about an $800 to $900 difference in your payment. And so new construction absolutely is affecting things, and that is why homeowners on resales are still pricing their homes a little bit too high because they're not factoring that in, that buyers have decisions and they have leverage right now. They can choose new construction or they can choose a resale but there's pros and cons to each. And some buyers, they are just new construction buyers. They want a brand new house. Others become new construction buyers because of financial incentives. And then you've got your resale buyers that want the mature neighborhood with the trees that have been growing for 30, 40, 50 years. That's a different crowd and they're after something else, right? But we're seeing more and more people act with their financial brain more so than acting with the emotional side of things right now. Because pockets are tight, the economy is what it is and it's definitely making people make different decisions right now. So we're also seeing that sellers who price their home too high, they chase the market with price drops and then they give on inspection requests like crazy, right? Because they have this fear of going back on the market. And so that's a trend that we're seeing right now is sellers are giving on inspection items more than I've seen in my career. Honestly, even more so than when I worked through the Great Recession. I don't remember sellers being this willing to give on inspection items to keep a deal together because of fear of going back on the market. The other reason why sellers are not pricing their home correctly is because they're not realizing that first time home buyers that represented 36% of the market now only represent 18% of the market because they've been priced out of the market based on payment and interest rates. On the condo side of things, if you're a seller who's trying to sell a townhouse or a condo, you may not have realized, ha, I'm sure you've realized that your HOA possibly doubled, right, in the last year. And if that doubled, plus your insurance costs went up, plus your taxes went up, all of a sudden, your home is now worth less, right, because a buyer's gonna factor in the overall payment. And so that's really stagnated pricing. And if you don't factor all of that in and think like a buyer thinks, then you'll just think, for sure my home's grown in the last two years, so I'm just gonna price it up here. But that's not the answer right now. Also, get this, okay, the average Denver mortgage payment for a condo or a townhome, these are all attached units, is 3,693 per month for a condo or a townhome, right? So you may be thinking, man, that's steep, especially when you have to consider HOA on top of that most of the time. But we're talking, you know, with where interest rates are right now, something that's in the average zone of like four to 450 is our average price for attached units. But that's what you're looking at on a monthly basis. Yeah, nationally, seven out of 10 buyers are priced out of that payment right now that would be first-time buyers. So that absence of first-time buyers with them being cut down so much is another reason why sellers continue to price their home too high and why sellers are giving up right now. The biggest reason sellers are giving up is pressure from every angle. First, pricing. Too many sellers are still stuck in 2022, listing high and then sitting for months. Second, competition. Builders in Aurora, Parker, and Castle Rock especially are offering 4.5 or even lower permanent fixed interest rates, right? And buy-downs on top of that sometimes. And resale sellers just simply can't match that. Third, inspections. Sellers are so afraid of going back on the market right now that they're cating on every repair request just to keep the deal alive. And finally, the buyer pool itself has shrunk tremendously. First-time buyers who used to make up over a third of the market are now closer to 18% of the market. And when you add in rising HOA dues, higher insurance costs, and taxes, mortgage payments now eat up 40% of the average person's income. And it's no wonder sellers feel like they're fighting a losing battle. I've seen deals fall apart over small inspection items simply because buyers know that they have leverage and sellers are desperate to hold on to the one offer that they've got after being on the market for 60 plus days. That kind of fatigue wears people down. And it's why so many people are just walking away instead of pushing through. And while sellers are feeling the squeeze, some parts of the market are getting hit harder than others. So if you look at the volume difference between the peak of 2020 to 2022, that timeframe, as far as how many people were moving during that time, if you look at condos and townhomes and just break that down, back then we had about 1,750 condos and townhomes that had sold in a single month during the high. And just this last month, we had 830. If you look at single family homes, back during the pandemic, we had over 5,000 homes sold in one month back then. And in just this last month, in August, we were down to about 2,400 homes that had sold in the month. And if you look at the luxury market and just segment the million plus category, this is where it gets interesting. You know, we had 700 was the high. That's the highest we ever got during the pandemic. This last May, we actually had 552 luxury homes that sold. So you can see like a 50% drop off in the first two categories, but the luxury category has only dropped off about 20 to 25%. And so that's a big factor right now. And it's because interest rates are not affecting all the cash purchases that are happening on the luxury market. And those people are still moving forward because that doesn't matter. And they feel like they can get a little better deal right now. And so it is a great time to buy a luxury home because you do have some more options available. And in that price point, in that segment, and how many of those that are selling in comparison to the others is pulling our average price point up and giving us like a false look at average price right now. So again, I believe that indicator is lagging and it will show later a little bit more of a loss because of all the things that are going on in the market currently. So if you look at condos and townhomes, the days on market are up 71% on those. Prices are down 5% year over year. And the condo inventory is up 116% compared to last year. Also the other segment that I'd like to focus on because it's single family entry level price point like that 450 to 600 is actually doing very well still. And so that's more of a competitive market. But that's 600 to $900,000 segment, that one has longer days on market. We've seen more price cuts from that category than any other right now. And there's some great opportunity there for buyers to get great deals. And especially if you can qualify for a little bit more, right? From 650 to 750, that may double the amount of house that you can have, literally. Like I've never seen that in the market before because of all that upward pressure on the starter segment. But then you've got a very soft upper segment in the market with opportunity there and lots of home city. Even luxury isn't immune. High-end homes are sitting longer and we are seeing cancellations and expires at the top of the market. Downtown condos are especially tough to move right now. Between high HOA dues, rising insurance costs and office vacancies that have drained demand for urban living, buyers are hesitant. In the suburbs, mid-tier sellers are losing out to new construction with better incentives. And in the luxury space, buyers are simply taking their time, knowing that they have choices. The pain is spread across the board, but condos and townhomes and mid-tier sellers are feeling it the most. And that's where the cracks in the market are showing first. So what does all this mean if you're a buyer in Denver's market right now? Okay, so you may be asking, how can I leverage all these factors in this shift that's happening in the market if I'm a buyer in today's market here in Denver? And I would say you can ask for concessions. You can ask for a lot of repairs on the inspection and you'll probably get them or get close to most of them. And then rate buy-downs. Guys, if rates are at six and a quarter right now, roughly, you can get a 4.25% interest rate for year one. Right now, 5.25 for year two with a two-one buy-down and the seller will pay for it in a lot of cases. So it's just a great time to get in for a very low interest rate. 4.2 is not that far off, you guys, from where things were at for all that time where they were floating in the threes. So it's definitely time to pull the trigger if you are wanting to be in a comfortable market where you don't have a ton of competition and you have lots of selectivity to choose from. However, with that said, understand that strong listings that are very desirable in desirable areas that are doing everything right fundamentally, pricing right, setting up their home right, prepping it for sale, those are going quick. So you gotta act fast when you see one of those. So if you're a buyer and you're seeing that we've had all these expired listings that are giving up on the market right now, understand that it may not be too late to grab some of those listings. So one thing that you can do, right, is you can give me a call. I'm happy to look at the expired listings that are out there and see if there are any where I can still reach out to the agent and find out if we could do an off-market deal now that they're off the MLS and find out if we can do that. If you were in a position like that, you wouldn't have anybody that you're competing with. You've got even more leverage in those cases and that's a seller that's already given up on the market, right, that would be very excited to hear about the possibility of selling their house in most cases. So it may be a great angle to attack those expired listings. That's something that I am happy to help you with and we'd love to guide you through that process and what it looks like. The average home price in Denver is around 675,000 right now and that's just slightly up from the peak in 2022. But again, that could be a lagging indicator. And buyers finally have room to negotiate. The key is to separate the strong listings from the stale ones. If a home has been sitting for 90 days or more, that's where you can push for closing costs, inspection credits, or even a permanent rate buy-down. But if a home is new to the market and priced correctly, you need to act fast. This is a market of extremes. Some homes are sitting forever while others are still selling you a weekend. Knowing the difference is how buyers win right now. But if you're a seller, this means that you need to play the game differently unless you want to end up being another expired listing. So here's my advice to sellers. In this market, pricing it right up front will solve 70% of your problems. So don't chase the market down with price reductions. Get it right up front. It's a market where even if you underpriced the home one or 2%, you'll still do very well in this market. Most of the time, the market will bid you up. There's enough buyers out there that when they see a great deal that everybody's looking for, sometimes that can create some very good leverage on your side if you want to flip the script right now. Also, understand that emotional appeal matters. It matters now more than ever because buyers have the opportunity to be more selective and be more picky with all the options that they have with inventory rising. Paint, flooring, light fixtures, appliances, counters, all of that stuff matters more than it has ever mattered before. And there's actually still some good return on investment that you can get from putting money in the right places in your home. Also, be realistic. Comps are down in condos and they're flat in the mid-tier right now. And so understand the trend of the comps, not just what's happened in the last six months to a year, but understand the trend of where things are heading. The recent comps that have sold in the last month or two are gonna tell you more of the story than the ones that sold six months ago in the springtime. Also, I can't believe that so many sellers are pulling their home off the market right now when we're just hitting the second best time of year to sell. The fall tends to be a great time to be on the market. And that market time in October all the way through about mid-November is very quality time to find a buyer. So you'll miss the fall market if you pull off right now. So I would just re-strategize and hit the market again. However, you wanna make sure to hit that window before the holidays when things really start to slow down. Also, make sure that if you're listing your home here soon and you've already spoken with a listing agent, make sure that your listing agent's game plan is to research and understand what's going on with new construction in your area. You know, how many new construction listings are there? What are the incentives that they're offering right now? So that you understand that and you can fully understand the perception of a buyer in your market that's looking at all options. Also, Summit Daily had an article just saying that buyers want move-in, turnkey-ready homes more than ever right now, not projects. They're squeezing into these homes with the budget right now, right? They're barely fitting into the payment. They can't take on the payment plus a ton of projects in the house, plus a ton of updating, right? That hasn't been done for the last 30 years. Plus, you know, old plumbing, electrical, all of that stuff that really could create more of a money pit situation. They're thinking they want something that's predictable because their payment is inflated. And so creating that predictability by setting your home up right, making sure that you're doing some of those repairs that may be worrisome to buyers is a very smart thing to do up front right now. The sellers who succeed in the market are the ones who adapt. That means pricing with today's comps, not last year's. It means making your home stand out visually because buyers are picky and when they have other options, they're gonna go that way. And it also means being more flexible in negotiations because buyers know that they have leverage right now. Sellers who refuse to adjust are the ones ending up as expired listing. Sellers who adapt are still getting deals done, even in this tougher market. So the big takeaway is this, sellers are giving up, but you don't have to if you understand how to play this market. If you are thinking about buying or selling in Denver, don't wait until your strategy fails. Let's talk about how to position yourself in a shifty market before you end up giving up too. My contact info is on the screen. Call me or text me and I'll walk you through your options. And if you wanna see how this ties into the bigger picture, check out my next video, Massive Price Cuts Hit Denver. That one will show you exactly where the biggest discounts are happening right now. Click it and I will see you there.