Denver Real Estate Market Update – May 2019
Lots of chatter going on about the Denver real estate market. Are things slowing down? Are we in a buyer’s market? Are prices dropping?
Let’s take a look at the numbers.
In April the average sales price of a home in the Denver area came in at $497,119. This was up 3.87 percent over March and up 1.5 percent over April of 2018. So, no home prices have not dropped in the Denver area. But the rate of increase has slowed. For years we have been seeing double digit year over year gains. Last summer Denver’s year over year gains in home price dropped into the single digits. And those gains are now sitting at 1.5 percent. Home prices in the Denver area have leveled out.
This does not mean that Denver will see price decreases. And it does not mean that we are in any sort of bubble. We could potentially see some year over year price decreases but we have not seen that yet. (We did have one month where median home price dropped year over year, but that was the case in only one month.)
So what has caused the leveling out in home prices? First off, I believe Denver hit it’s affordability high for the time being. We could only see double digit gains for so long.
Also, inventory is up. At the end of April there were 7,012 homes on the market. This was up 11.44 percent over March and up 33.89 percent over April of 2018.
Sales are also down. 4,675 homes sold in the Denver area in April. This was up 4.17 percent over March but down 7.17 percent from April of 2018.
So, does this mean that we are now in a buyer’s market? Not even close! Sellers still hold the cards although buyers are not feeling desperate like they were for the past few years.
A buyer’s market is when there is 6 plus months of inventory on the market. A balanced market is when there are 5 to 6 months of homes on the market. A seller’s market is when there are less than 5 months of inventory. Where is Denver now? Currently in Denver we have 1.5 months of housing inventory. You can see this is a far cry from the 5 months of inventory it takes to even be considered a balanced market.
In the last few years we often saw inventory below a month. So, having inventory at 1.5 months brings some much needed relief to buyers.
Average days on the market is currently sitting at 28 days.
Denver’s real estate market has slowed a bit. Prices have leveled out. But we are still in a strong market. Seller’s can rest assured that the market is still in their favor and buyers can relax a bit knowing that they don’t have to give their first born up to buy a new home.
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