The Denver housing market saw a drop in housing prices in July, news that should come as a relief to homebuyers, who have faced double-digit appreciation in prices over the last year.
According to REcolorado’s monthly report, the average selling price of a single family home in July was $408,406. This represents a 2% drop from June, when the average sold price was $418,747. (Lest buyers get too giddy over the numbers, however, both sales figures represent record highs for the Denver market, which breached the $400,000 mark in May for the first time ever.)
Homebuyers also enjoyed a larger inventory of homes to choose from in July. The number of active listings rose 10% in July to 8,859 from 8,030 in June. But new listings dropped 9%, from 8,248 in June to 7,483 in July.
The average price decline may indicate a slight slowdown in the market — an event some experts have been predicting for many weeks. Real Estate Economics chief economist Mark Boud told the Denver Post last month that he expected to see an end to the double-digit gains in metro-area home prices in the second half of 2016. Boud is predicting a sustained time period of minimal price increases, followed by small declines.
“Barring major job losses,” the Denver Post noted, “Boud doesn’t see a slump like 2007 to 2009, when the metro area suffered a tough stretch of falling home prices that drove a surge in foreclosures and distressed sales. But the leveling off could require an adjustment in thinking and strategy in a market accustomed to sharp increases in home prices.”
Many experts feel that area home prices have finally reached the limits of what incomes here can support.
“It’s an affordability issue,” Denver Metro Association of Realtors (DMAR) Committee member Steve Danyliw told the Denver Post. “Prices have gotten so high. Wages aren’t keeping pace with home prices.”
DMAR Market Trends Committee chairman Anthony Rael noted that rising prices are a nationwide problem. “Affordability throughout the country is a major issue right now,” Rael told the Post. “The rest of the country is nipping on the heels of what we’ve been going through.”
Despite talk of slowdowns in the market, homes still sold at a fast clip last month. The average home spent 20 days on the market in July— the same as in June. Local brokers are also reporting an uptick of activity in the first week of this month.