Home and Condo Sales Slump
From July 2017 to July 2018, 80,000 people moved to Colorado revealing it as one of the most desirable places to work and live in the US.
The city’s low unemployment rate, higher wages, and high job growth were factors drawing new people here. And it had become one of the nation’s hottest housing markets and perhaps one of the best places to buy a home.
In early 2018, the Denver housing market started strong then fell as economic forecasts became gloomy. One wonders if that dramatic swing might be a prelude into a crash if the national economy falters?
Yes, the growth curves have been some of the nation’s steepest, but what happens on the backend if the economy should take a dive?
The economy is holding, yet sales are slipping. Denver has plenty of nice neighborhoods, yet buyers aren’t buying even as supply of homes doubles.
Market Report for February
In the Denver Metro Association of Realtors Denver housing market report, new listings were up 10.3% month to month for single family homes and 19.5% for townhouse-condo properties. Median sold prices dropped 0.7% to $417,500 for single family, and were down .7% to $298,000 for townhouse-condo properties. Days on market increased 18.4% for single family homes and 9.1% for condo properties.
Denver Home Buyers on Hold
Where did all the homebuyers go? First of all, they still don’t have enough funds to buy. Secondly,they want to see if prices will begin to crash. At least they hope so. There are plenty of millennial buyers but they can’t afford current home and condo prices. They’re struggling with their rents.
Home sales in 2018 dropped 5.5% while inventory rocketed upward 44.7%. Home prices reached a record maximum of $473,539 for the entire residential market (single-family and condos). This was up 8.3% for home and 7.9% YOY. In 2018, the price of a single-family home sold in metro Denver was $522,839, up 8% from 2017. The average price of a condo sold grew 9.8% to $351,677.
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Sellers Beginning to Panic?
With home prices flattening, buyers in short supply, and inventory up strongly, home sellers in the greater Denver are seeing it taking quite a while longer to sell their homes. Is this the right time to buy? Or, is this the best time to sell?
It’s the same trend affecting most US housing markets and shaping the softer forecast for 2019 and 2020. And if sales don’t pick up in March and April in many cities across the US, we could see sellers panic.
What Drives Denver’s Housing Market?
Key drivers of supply in Denver include: developable land shortage, materials costs, local and state building regulations. Although some buyers are relieved at lower prices, the long term solutions for more afforable and available and desired types of housing remain suppressed. This situation may lead to prices beginning to climb along with the robust Colorado economy.
Colorado is second best for jobs and the fifth best state economy. Unemployment was at 3%, bolstered by the energy sector, however, President Trump has stated a preference for lower oil prices. That raises the correction risk for Denver housing if oil should fall to $40 a barrel. The Houston housing market would be similarly effected by a negative price forecast.
Best time for sellers to list their properties is April, May and June to access the highest periods of buyer demand. Quite a few sellers are beginning to exist desperate responses fearing a housing correction amidst US political and trade issues.
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Now that interest rates have flattened and with lots of inventory, we could sales pick up in Denver. Millennial renters have more money saved and are still expressing interest in buying a home or condo. Many buyers are holding off on buying with the belief that prices may collapse further. Your realtor will need to deal with these objections.
January Sales Down and Listings Skyrocketing
In January, new listings were up 13%, active listings were up 52% from last January and DOM is up an astonishing 125%. Sales volume is down 12% over the last 12 months.
In the Denver luxury market (single detached above $1 Million) sales slumped 31% from December, and were down 15% from last year. DOM jumped by 26% from last year. However the luxury condo market has done better. Sales volume was down 21% from last month, yet prices jumped 94%. DOM grew substantially in January. Given the low volume of sales, the average prices may not be relevant.
The forecast for home prices in Denver is to rise despite slowing sales and increased listings.
Zillow sees prices rising by another $17,000 by January 2020. Yet for many sellers, it appears properties will stay on the market quite a while longer. You’ll need a good Denver Realtor to sell faster. Now may be the best time to sell.
Despite flagging sales, the rental market is still strong. Average rent prices are holding at above $2100 a month.
What Are the Best Neighborhoods in Denver?
Spacewise Storage offered up its top 11 neighborhoods in Denver. They’re as follows:
- Cherry Creek
- Congress Park
- Greenwood Village
- Hampden South
- Indian Creek
- South Park Hill
And Homesnacks chimes in with their list of best neigborhoods:
Here are the best neighborhoods in Denver for 2019:
- Cherry Creek $663,500
- Washington Park $537,873
- Golden Triangle $418,600
- Lodo $441,900
- Central East Denver $416,967
- University $546,855
- Stapleton $469,300
- Southeastern Denver $277,859
- Park Hill $366,040
- Highland $382,556
That’s an initial look at Denver’s housing market. Please do bookmark this page and share it. People like to know more about Denver, and the influx of immigrants is what supports home prices in the region.
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