February report on Denver housing market report shows more inventory, rising prices

by | Mar 8, 2018 | Blog

The Denver Metro Association of Realtors’ (DMAR) report on the city’s housing market for February delivered both good and bad news for homebuyers.

The welcome news for those who have faced an exceedingly tight market in recent years is that more homes came on the market than expected last month. Inventory in February rose 10.88% over January and 5.56% over February of last year, with 4,638 new listings recorded.

“This is good news, as we normally see a small seasonal decrease this time of the year,” says Steve Danyliw chairman of the DMAR Market Trends Committee.

Also good news for those shopping for a home is that some sellers are reducing their prices, once they realize they have overshot the market. “We continue to see price reductions up to 3% on properties listed above $500,000, as sellers seems to be shooting for the moon when setting a list price,” notes the DMAR report.

Unfortunately, rising prices continue to be a significant issue overall. The average price for a home (condos and single family homes) in Denver rose to $400,000 for the first time in February. The average price for a single family home (without condos in the mix) rose even higher, increasing 2.48% from January to February-to $502,986.

Many worry that the market is becoming out of reach to first-time home buyers.

“Our housing market is showing few signs of slowing down as prices continue to surge upward,” notes Danyliw, adding that the new high “may represent a psychological barrier for some buyers wishing to enter the market.”

Meanwhile, as if to underscore the point, LendingTree ranked Denver at the top of its list of the 10 “most challenging cities for first-time buyers” -ahead of New York, San Francisco and Austin, Texas. The mortgage company evaluated markets for factors such as average down payment amount, percentage of buyers with low credit scores (below 680), and the share of homes sold that “the median income family can afford.”

“Denver is not the most challenging city in any single measure,” notes LendingTree, but when all the factors are considered together, the city jumps to the top of the list and creates a tough market for first-time buyers. The average downpayment in Denver, according to the LendingTree study, is close to $67,000.

In light of the situation, it should come as little surprise that affordable housing ranked as the top priority for respondents of a recent survey. Conducted by Strategies 360, the survey polled 404 likely 2018 voters last month. Thirty-five percent identified affordable housing as their number one issue, a 5% increase from last year’s survey. 94% agreed the lack of affordability in Denver home purchase and rents is a serious problem. Finally, 66% agreed that Denver’s elected officials are not taking enough action to make housing more affordable and address homelessness.

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