The weather isn’t the only cool-down happening right now. Home sales have fallen off the fevered pitch we’ve seen for most of the last 4 ½ years, and will likely remain at this, more balanced pace for at least the next 3 months. Market vitality, or “absorption” as it’s called in my data reports, has fallen off by 35% since early May. That’s welcomed news for the many prospective buyers that have been all but left in the dust in recent times. One agent used the term “Buyer Fatigue” for the recent slowdown, which I think is a fit description of at least one of the factors involved. The buyer fatigue is from prices and interest rates rising together, faster than incomes, to the point many buyers just can’t catch the prize they want.
Unfortunately, interest rates are expected to continue to rise, slowly but steadily, for the foreseeable future. That’s un-welcomed news for buyers and sellers alike. Another element at play is decreased immigration overall from other states for jobs, especially marijuana jobs. Now, the huge incursion of new apartments all over town has taken the pressure off rents in some degree, so at least one large segment of motivated, otherwise home buyers have temporary relief there, but they’re still left behind those who managed to buy while they could. For those who still truly want or need a house, the pressure remains, and prices will continue to rise, albeit at a slower pace than they have in recent years. One year ago the median price of a single-family home in the Denver metro was $410,727 and today it’s $442,648. That’s 7.8% appreciation, which is considered a healthy increase. That pace could still drop more, and likely will, without raising fear of an actual market correction, which says that Denver is still a good market to buy anew, move up, and/or invest in rentals. It’s very important to note that this all just refers to the middle segment of the market. The low end is still white-hot, and the high end is softer than it’s been since 2012. If you want more specifics regarding those markets, ask me. Remember, knowledge is power. I have lots of relevant data and 35 years of experience with which to evaluate it!