If you have recently been active in the Denver area real estate market, this information may reinforce your experience. However, if you are not in the market to buy or sell a home and rely on news headlines for your information, this month’s report will bring you up-to-speed with what those of us in the real estate market are experiencing. And what is that exactly? In short, the Denver market is cooling and it may not be a typical seasonal shift. The Denver Post recently reported on the October “Denver Metro Real Estate Trends Report” published by the Denver Metro Association of Realtors (DMAR), of which I am a member.
For the past several years, the Denver real estate market has been at or near the top of the national charts with headlines like these: “Fastest selling market in the country,” “highest percentage of homes valued above pre-recession levels,” “highest home value appreciation in the country.” It is because of this trend and these headlines that this month’s Denver area real estate market report may come as a shock.
Before I get into these market statistics, let me briefly run through the market as I’ve seen it this year: The first full week of January was a noticeable shift from the prior several months, “game-on” sums it up. Buyers were back in the market and ready to pull the trigger. I went under contract on two properties on the same day in January (interestingly, October is the only other month this year where I went under contract on two properties on the same day). The market continued to heat up through March and April, with multiple offers and quick sales being quite normal. Then May arrived and it was like the wind stopped and the sail collapsed. In 2017, I noticed this in July. At the time we thought this was our seasonal shift as inventory increased to better meet buyer demand.
Increasing mortgage rates from about 4.0% to 4.5% encouraged buyers to buy earlier, adding to the frenzy and pushing prices upward, but it also created slack in demand for May and June.
I noticed activity revive a bit in mid-July and that pace has been somewhat consistent through today. However, what is changing is more inventory on the market than typical. That is the key story here, we have more inventory going into Q4 than we have in the past several years. We’re at 2013 inventory levels! And with that I’ll skip ahead to page 13 of the report. Note the increase in inventory over the past few months. We are now above the trend, which makes me think next spring will not be as hot of market, instead we’ll see a more balanced market.
This market shift is great news for buyers as well as sellers that have been holding out selling for fear of then having to compete as a buyer when looking for their next home. If you own a home in the Denver area and want to sell and buy another home in the Denver area, now is the opportunity you’ve been waiting for.
Here is a market overview:
And DMAR’s summary of this report is definitely worth reading:
If you have questions about our real estate market as it relates to your specific interest in buying, selling or investing, please pick up the phone and call me or send me an email. I look forward to starting a conversation.
- Denver Post 10/7/18: Balance of power shifting in metro Denver’s housing market
- Denver Post 10/5/18: 30-year mortgage rates bust through 5 percent and keep rising
- Denver Post 10/4/18: Major cold front slams Denver housing market in September