This market update was discussed in theJanuary 2019 roundup podcast.
If you looked at just a few of these metrics you would think that the Denver housing market is headed for collapse. We are far from that. The median sales price of single-family homes and attached homes are both down a few percentage points, however, the average sales price is up for both. This indicates that there are some lower cost homes on the market but in general, they are harder to come by and have gone up in price. The market has more inventory of homes above the average price than homes below.
Some areas in the Metro Denver area saw little to no appreciation in the last year. Again, not an area of concern. Many areas still saw growth at 16% or better. Overall, the Denver market still had a net appreciation. We are slightly off our hockey stick growth trajectory of the last couple of years but still trending
Inventory has increased 52% year over year, but January 2018 had the lowest inventory in recorded history. Even with this addition, we are still far below a balanced market. The amount of homes sold has stayed in a consistent band, the lack of inventory has been the main driver behind the chaotic market for the last 5 years. As inventory increases, we will make the necessary transition towards more market equilibrium.
Current buyers have a unique and short term advantage right now. Showings per house and the absolute number of showings are down but have been picking up since the end of last year. Buyers on the fence should use this opportunity when they are facing less competition to get out and purchase! As spring nears we should expect showings to start increasing again and for more buyers to be on the market increasing the competition.
Days On Market has plunged since the end of the Great Recession. In the last 3 years, we have seen an all-time low of 25 days. Previous seller’s markets had seen double the length of time compared to where we’ve been lately. As the DOM grows it will help lead to a more balanced seller’s market. We may have witnessed a once in a lifetime event with the way that houses were being sold in Denver for the last 5 years.
To best sum up the current situation our local real estate economics guru says it best.