The metro Denver housing market saw a significant—and immensely welcome—jump in inventory from May to June, with the number of homes for sale rising nearly 20%, according to Denver Metro Association of Realtors’ (DMAR) monthly report.
Residential inventory rose 19.75% in June over May, far above the 10-year average of 6.24% increases for June.
Condominiums saw the largest gains in inventory, with a 22% jump over last year, versus a decrease of 0.72% in single family home inventory.
The jump in inventory will come as welcome news for those who have been frustrated by an exceedingly tight market over the past several years. “Numbers like this give hope to buyers that our extreme sellers’ market may be showing some early signs of easing,” says Steve Danyliw, chairman of the DMAR Market Trends Committee.
Unfortunately for buyers, however, prices have yet to drop accordingly. While homes under $400,000 are in hot demand, they are exceptionally sparse. Such homes, according to the DMAR report, made up 65% of the market in 2011, versus 26% today. Meanwhile, the average single-family home sold in June for $498,792, representing a 7% increase over June of last year.
“(The question is): What can the average home buyer truly afford, and can they afford these home prices?” Danyliw told the Denver Post. “I think (prices) will continue to creep upward. The affordability question is hard to answer…
“We still have amazing demand, but I don’t think we have the wages in the metro area to support these prices continuing to approach a half a million-dollar price point,” Danyliw told the Post.
On the plus side, Danyliw said this is the first time since 2013 that the market has indicated that price increases may slow. “It’s really going to hopefully create balance that will favor buyers,” Danyliw remarked of the rise in inventory.
Still, any optimism over the loosening of inventory should be tempered with caution. A recent report from Nationwide insurance found Seattle and Denver tied for the lowest inventory in the country. While the study was researched during the first quarter of 2017 when Denver inventory was at record lows, the trend of tight inventory had been well-established before the June change.
“The numbers paint a pretty clear picture: Areas with low housing inventory are heavily concentrated in the West, particularly Washington and Colorado. The five cities with the lowest inventories are all in either Colorado or Washington,” notes Denver 7 of the report.