Denver metro’s housing market continues to creep ever closer to balance, according to the latest monthly report from the Denver Metro Association of Realtors (DMAR). The shift is impacting all levels of sales, including the $1 million and up “luxury” category.

The end of September saw active listings increase to 7,683, a 10.72% increase from August and a 93.48% increase from September 2021. Month over month, sales volume decreased by 6.38%, and pending sales declined by 15.41%. Closed properties saw a sharp decline from last year, at 27.6%, with 4,113 residences closing in September. Average days on the multiple listing service (MLS) hit 26 days in September, a 100% increase from last year, according to the report. 

Despite Denver Realtors seeing price reductions happen in desirable areas where they haven’t seen price reductions since the pandemic, some metrics are still on the rise; the median close price in September was $580,000, a .87% increase from August and a 9.43% increase from September 2021. 

In the report, Realtor Libby Levinson-Katz described Denver as moving towards a balanced market, something the city has not seen in more than 16 years. 

“A traditional cycle for the Denver real estate market is seven years. Due to an economic crash and a global pandemic, the cycles were extended, but a correction is needed,” she said. “The market is entering a period of neutrality where the bullish ways of extreme markets make way for a stage of compromise, with buyers and sellers working together for a win-win experience.”

After a year of questioning whether $1 million homes should be considered luxury properties in Denver, that category of homes is seeing significant shifts.

According to the DMAR report, home inventory to last the market less than three months creates a seller’s market, while home inventory that lasts the market more than six months creates a buyer’s market. The market for attached homes costing $1 million or more hit 2.83 months of inventory, just on the cusp of exiting the seller’s market category. Similarly, detached homes in the $100,000 to $199,999 are getting close to leaving a seller’s market, as it stands at 2.75 months of inventory. 

Realtor Colleen Covell commented in the report that although the numbers may technically show the luxury market as still in a seller’s market, she’s seeing something different. 

“We are experiencing full inspection objections, price reductions, no competing offers, no appraisal gaps and even contingent offers. The question on everyone’s mind is are we finally in a luxury buyer’s market? The technical statistics may say ‘not yet,’ but it sure feels close,” Covell said in the report. 

More luxury home sellers (those with properties worth $1 million or more) listed their homes in September, at an 18.86% increase than in August, while the attached luxury market saw a 66.67% increase in new listings from the prior month. Total, 649 homes hit the market last month. The luxury market is seeing quite the influx of inventory, with 5,962 new listings so far in 2022.

The average days on the market rose month over month for the luxury market, 31.82% and 40% for detached and attached homes respectively, giving buyers more time to decide to make an offer. Pending sales also dropped in September, as did the close-price-to-list-price ratio, according to the report. 

A Redfin report recently found that price drops are becoming increasingly common in the luxury home category — yet a Denver home recently listed at $28.9 million, which would be a high-water mark in residential sales here.

DMAR includes the metro counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties in its monthly real estate reports. The organization pulls data from REcolorado.