The "Frozen Market" in Real Estate: Implications for Buyers and Sellers

The "Frozen Market" in Real Estate: Implications for Buyers and Sellers

The real estate market is known for its fluctuations, with periods of booming sales and rapid price increases, followed by times of stagnation. In recent months, there has been growing talk of a "Frozen Market" in the real estate industry, a term used to describe a situation where home sales seem to be at a standstill. Let's delve into what this means for both buyers and sellers.

Understanding the Frozen Market

The term "Frozen Market" refers to a slowdown in the pace of existing home sales. This phenomenon often occurs due to a combination of factors, including rising interest rates, supply chain disruptions, and economic uncertainty. One such example is the September 2023 report, as highlighted in a CNN article. These factors can lead to homes spending longer on the market, a decrease in buyer activity, and potentially a leveling off of home prices.

Implications for Buyers

For potential homebuyers, a Frozen Market can present both challenges and opportunities:

1. More Inventory: As homes stay on the market for a longer duration, there may be more options available to buyers. This can be advantageous for those who are looking for their dream home and have time to explore different listings.

2. Negotiating Power: With decreased competition, buyers may have more negotiating power when it comes to pricing and contingencies. Sellers may be more willing to compromise in a slower market.

3. Interest Rates: However, it's important to keep an eye on interest rates, as they can influence the affordability of a home. Rising rates can counterbalance some of the advantages of a Frozen Market, so buyers should lock in favorable rates when possible.

Implications for Sellers

Sellers, on the other hand, may need to adjust their strategies in a Frozen Market:

1. Price Realism: It's essential for sellers to set realistic listing prices. In a slower market, overpricing can lead to prolonged days on market and potential price reductions, which can be detrimental to the sale.

2. Home Presentation: To stand out among the competition, sellers should ensure their homes are well-maintained and properly staged. Making a positive first impression is crucial.

3. Patience: Sellers may need to be patient and prepared for their homes to remain on the market for an extended period. This doesn't necessarily mean they have to accept lower offers, but it does require resilience.

Conclusion

A Frozen Market in real estate can have varying effects on both buyers and sellers, depending on their individual circumstances and the local market conditions. Staying informed about the latest trends and working with experienced real estate professionals can help navigate these challenging times.

In the end, whether you're buying or selling in a Frozen Market, the key is to adapt to the situation and make informed decisions that align with your long-term goals and financial stability.

If you have any questions about how you can navigate through the FROZEN Market, don’t hesitate to reach out. We are here to help!

Why NOW is the Time to Sell and Buy in Colorado!

We are Brigette and Jay Modglin, representing The Modglin Collection with Kentwood Real Estate in Denver, Colorado Today, we are delighted to delve into the current real estate landscape and share why the present moment presents an exceptional opportunity for both selling and purchasing real estate. Right now, the real estate market occupies a distinctive position. Notably, we observe a surge in interest rates, which might appear daunting to some. However, it is crucial to discern that this circumstance can indeed be advantageous. Opting to sell your property now allows you to leverage the constricted supply, potentially commanding a premium price for your real estate asset. It is worth noting that the process might require a tad more patience than in previous years, but with the right seasoned agent by your side, you can secure the highest possible sale price. On the buying side, while interest rates have ascended, this presents an huge window of opportunity. The reduced competition translates to an ideal moment to acquire your dream property without entering into bidding wars. Moreover, it is imperative to remember that interest rates are not fixed; refinancing remains an option when they undergo a downturn. Furthermore, if you are a seller contemplating a purchase, there are current opportunities where sellers may entertain the prospect of a contingency sale. Additionally, negotiations could lead to the seller contributing a credit to alleviate interest rate burdens. Anticipate a future scenario where interest rates resume a decline; this will likely result in a resurgence of buyers, propelling prices upward and intensifying competition. Thus, the prudent course of action is clear—sell and buy now, with The Modglin Collection team as your steadfast guides throughout the entire process. Lastly, it is noteworthy that since 1992, the Denver market has demonstrated an annual appreciation rate of 6.8 percent. Even during the 2008 market downturn, Denver only experienced a modest negative 4.8 percent appreciation, in stark contrast to double-digit declines in other markets. We invite you to reach out to us today, let’s discuss how we can facilitate your navigation of this opportune moment in the real estate arena. We appreciate your viewership, and always remember, the optimal time for action is now!

TheModglinCollection.com

303-408-2600 | 303-472-2150

June 2023 Real Estate Snapshot

May Quick Stats:

• Average active listings for May are 14,895 (1985-2022).

• The record-high May was 2006 with 30,457 listings and the record-low was set in 2021 with 2,075 listings.

• The historical average increase in active listings from April to May is 7.05 percent. This year's increase of 13.16 percent represents a healthy increase but far off from our record 26.8 percent in 2019

April 2023 Real Estate Snapshot

November 2021 Real Estate Snapshot

Greater Denver Metro Real Estate Market November Trends Report Gives Buyers and Sellers A Reason For Gratitude This Holiday Season

In a year of continued turbulence, October represented a month of relative ease in the bumpy Denver real estate market, signaling gratitude across the housing industry. Across the board, the majority of statistics were seasonally consistent with what Denver has seen in years past, boding well for more households having the ability to host a Thanksgiving dinner. With prices staying consistent month-over-month, the door has opened for buyers that were previously exhibiting burnout in the home search process.

In the month-end active inventory, Denver saw that when lower numbers change, they yield higher percentages. At the end of October, there were 3,376 properties on the market, a 14.98 percent decrease from the previous month. The amount of listings also decreased by 13.28 percent, showing minimal changes in the month-end inventory.

There were over three times more single-family properties closed last month in the $500,000-$750,000 category than any other price point. However, currently there are more single-family detached properties available over $1 million than any other price point, which is far less surprising than the quantity of for sale properties between $500,000-$750,000. 

The DMAR Market Trends Committee releases reports monthly, highlighting important trends and market activity emerging across the Denver metropolitan area. Reports include data for Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties. Data for the report was sourced from REcolorado® (November 3, 2021) and interpreted by DMAR.