October Real Estate Market Update

The 10 year Treasury started September near 4.8% and closed the month at 5.22%, touching its highest level since 2007 along the way. Mortgage rates followed it right up the stairs. The average 30 year fixed went from about 6.8% to 7.34% by month’s end. On a $575,000 home (Denver’s median close price last month) with 20% down, that’s roughly $167 more every month. A 5.6% jump in your payment. In 30 days.

Before we get into what that did to Denver, let’s talk about why it happened.

Bonds 101, the 60 second version

Bonds don’t move like stocks. A bond’s price and its yield move in opposite directions. When fewer people want to buy a bond, its price drops and the yield climbs to entice someone to take it. Lots of buyers? Price goes up, yield comes down. So when you hear “yields spiked,” what actually happened is investors backed away and bond prices fell.

So why did investors back away? Three reasons, and they’re all tangled together.

Inflation is stubborn. Oil surged on geopolitical pressure, and that kept inflation fears front and center.

Supply flooded the market. The government keeps borrowing to fund a ballooning debt, and corporations, led by big tech companies funding the AI buildout, are issuing bonds at a record pace. More bonds for sale means each one has to pay more to find a buyer.

The Fed raised rates. Mid September, the Federal Reserve hiked for the first time since July 2023. That move was a reaction to the first two.

What does this mean for you? Financing anything just got more expensive, and that’s the point. The Fed wants us to borrow and spend less for a while so demand cools and inflation comes back in check. Geopolitics? We won’t go there.

What it did to Denver

Here’s the catch: most September closings went under contract in August, before the worst of the rate move. Even so:

• Closed sales fell 11.71% from August and 21.39% from a year ago to 2,849, the fewest September closings in records going back to 2008.
• Pending sales, our first real read on the rate spike, dipped 6.07%. A pullback, not a collapse.
• Active listings rose to 13,567, the highest September level since 2011.
• New listings were flat. Sellers didn’t flood the market. Buyers slowed down.
• Median days in MLS climbed from 27 to 32.
• The median close price landed at $575,000, down 3.2% for the month and 1.88% year over year.

Months of inventory hit 4.76. That’s still balanced territory (4 to 6 months), not a buyer’s market. Condos and townhomes are the exception. Attached homes sit at 7.21 months, firmly in buyer’s market territory, with the median attached price down 6.28% from last year.

From the field: we’re seeing more deals fall apart between contract and close. The stats here are thin, so take that as what we’re seeing on the ground, not a trend line.

We’re not panicking. Fall always slows down. This one just has a little extra juice from rates, and the real test shows up in October and November closings.

What this means for you

Sellers

Depending on what you own, you’re either doing fine or you’re in the suck. Let’s not sugar coat it.

The $1 million plus market is doing its own thing. Closed sales there are up about 2% year to date, and those homes sold in a median of 21 days in September. Meanwhile, the $500,000 to $749,999 range, where most of Denver lives, saw closings drop nearly 30% from last September. Condos have it toughest of all.

If you’re in the middle of the market or selling attached, getting buyers through the door is tough. Colorado just ranked number one in the nation for price cuts, and a cut alone isn’t bringing buyers to the table. Nice finishes and a great location aren’t enough on their own either. So what do you do? Patience. That might mean riding it out, or it might mean waiting for spring. Finish those projects now. And if you’re fortunate enough to get an offer, expect to bring more to the table at inspection.

Buyers

You’re in the driver’s seat. Sort of. You have loads of choices and real room to negotiate, and the fourth quarter brings the least competition of the year. Rate buydowns, seller paid concessions, and closing cost credits are all on the table right now.

There are limits, though!! Most of these sellers have low rates and high repair costs. They aren’t feeling the pain you’re feeling, so they won’t hand over everything including the kitchen sink. Temper your expectations. Most importantly, be willing to walk. We’ve advised clients to do exactly that.

Here’s a real one. After some tough negotiations, the sellers refused to fix a faulty roof, one that might have been covered under warranty. We were $5,000 apart. $5,000. The sellers dug in, and the deal fell apart. In this market, it’s better to walk away from a potential problem than to fall in too deep on the wrong house. My clients are now getting a different home with better updates that fits their needs better. There was an opportunity cost. And yes, you’re wondering why we didn’t go after the second home first. Fair question! Trade offs were made.

For our relocation clients

We welcome you with open arms this fall. This is where renting first earns its keep. Settle into one of our homes, spend the season learning the neighborhoods, and watch the market without a lease clock or a rate lock forcing your hand. Most of the hunting will likely wait until things thaw in the spring. But if the right home shows up this winter while everyone else is waiting, you’ll be ready to move.

In the meantime, enjoy everything a Denver fall has to offer. We’ll keep being the voice of reason in this market.