For our friends on the Denver Metro Association of Realtors Market Trends Committee, this has been the most action-packed season they have studied in quite some time. Just as we are winding down another year of low inventory and lower interest rates, something happened that many did not see coming.
In September, housing inventory continued to move higher, even though it typically decreases this time of year, and home prices dropped nearly 5%, since its record-peak highs this past May and June. A quick departure from what had become the norm, as sales of single-family homes over $500,000 dropped 33% from August to September, causing sellers some turbulence they were not braced for. Price reductions and longer days on the market are grabbing the attention of buyers who were taking a break from the buying frenzy, to now trying to find a “deal” that did not exist even a month or two ago.
More signs of cooling can be seen with months of inventory increasing to 2.33 months for single-family homes in September compared to 1.68 months the month prior and increasing to 1.93 months for condos compared to 1.48 months in August.
Going forward, expect interest rates to rise into 2019 and beyond as economic indicators stay strong, which will shelf some buyer’s opportunity to make a move. Also, look for listing inventory to find higher levels than we have seen, which could bring investors back to the table looking for fresh opportunity. The sky is most certainly not falling but things are shifting a bit back towards a balanced market.
Blurb courtesy of Justin Knoll
Madison & Company Properties