Chilly temps, fall leaves, and a new school year typically herald a seasonal slowdown in Denver’s real estate market. But this September, the year-to-year comparisons showed some significant changes.
First, the city’s low housing inventory—which has long been to blame for Denver’s tight real estate market—continued to slowly increase, as did average days on the market. Active residential listings (that’s condos and single-family homes) finished September with 8,807 total units—a 16.1-percent increase over September 2017.
Second, overall sales slowed: This year, 28.9 percent fewer homes sold in September than in August; in 2017, that month-to-month drop was 20.2 percent.
And third, though prices are still increasing, “it’s no longer double-digit growth,” says Steve Danyliw, chairman of the Denver Metro Association of REALTORS’ Market Trends Committee, which releases monthly reports highlighting housing trends and market activity. The median price for a single-family home sold in September 2018—$428,000—was down 2.7 percent from August 2018. But the year-to-date median sold price—$445,000—is still 8.54 percent more than it was last year.
Interesting things are happening within the typically competitive $500,000 to $700,000 price range: Thirty percent of these homes sold after a price reduction averaging $29,000—“important information for sellers when they are thinking about their price,” Danyliw says.
What does it all mean for those of us ready to buy or sell? “We are experiencing change, but we’re not falling off any cliffs,” says Danyliw. “We’re coming into balance, but we’re really not even there yet.” Denver tends to feel real estate changes earlier than the coastal cities, he adds, so while these subtle clues hint at a shift, don’t expect major adjustments in the near term.
Danyliw says that with about two months of inventory currently available—meaning it would take two months for the current inventory to sell, given the current pace of home sales—it’s still a good time to be a seller. “Back in January, we only had 4,000 homes on the market, so even with the increased inventory, it’s still a seller’s market,” he says. “But it’s a healthy market: Economic conditions are good, and people are definitely still moving here. People have jobs and equity in their homes—and that’s a good thing.”
But even with a minor market cool down, buyers are still dealing with affordability issues. “Prices continue to go up at a healthy pace, but wages haven’t kept pace,” Danyliw says. “Interest rates are expected to continue going up in 2019, and while we don’t see that being a huge concern for buyers, it does impact affordability.”