Denver’s residential home inventory declined slightly in October to 7,290 homes, but this still marked a 116% year-over-year increase, according to the Denver Metro Association of Realtors Market Trends report released Thursday.

As the number of available for-sale homes declined, the number of closings dropped 24.64% to 3,315 last month.  While inventory is still below pre-pandemic levels, report authors noted, it’s an improvement from the previous year.

The average sales price in October fell again — the second month in a row — to $661,335, a 1.36% drop. That’s still up 8.22% from the average sales price in October 2021. The median price dropped month-over-month as well, to $566,000.

Inflation and higher interest rates are changing the market in Denver, according to the report, as evidenced by new listings declining about 27% from last month.

“This number may be falling as sellers delay selling, for now, prefering to sell during the peak spring selling season,” according to Libby Levinson-Katz, chair of the group’s Market Trends Committee.

She noted if 2020 and 2021 super-sellers’ market trends were removed from the equation, the market would still be on pace with where it would have been if the pandemic had not occurred.

“There are opportunities to look at the silver lining of every scenario,” Levinson-Katz said in a news release. “This evolving marketplace allows buyers more options and the gift of time to decide on a home while negotiating terms that suit their needs.

“Meanwhile, sellers can analyze the marketplace to position their homes correctly while being able to experience a great return on investment due to rising prices over the last years.”

Alongside the sliding prices, the average number of days on market continues to increase. In October of 2021, the average Days on MLS (multiple listing service) was 14 days. Now, homes spend 28 days on the market — up 7.69% from September.

The report suggests that the extended time on the market could be due to inflated prices.

Luxury home listings fell nearly 29% in September. Of all price points. the luxury market has had the most months of inventory, according to the report. This indicates the demand for a luxury property has decreased, providing more power to buyers in negotiations.

“While bidding wars are not as common, I had a client who had to compete on a million-dollar house that went above the asking price. Each listing will always dictate its own story,” Andrew Abrams, Market Trends committee member and metro Denver realtor, said in the release.

“While buyers may think they have negotiation power in this market, many sellers are hesitant to drop their price too much,” he said, “which is why the close-price-to-list-price ratio in October was 98.72 percent. November should represent a similar flow as October. Inventory decreasing, buyers being patient to find the right house and negotiations tough for both sides.”

The report covers the 11-county metro Denver market, including Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.