After years of undersupply, metro Denver’s housing market is experiencing a surge in listings that has brought counts to levels not seen since the fall of 2013, according to a monthly update from the Denver Metro Association of Realtors.
Buyers and sellers alike have pulled back as they wait for lower mortgage rates and what comes next. And defying the odds, home prices continue rising despite slowing activity.
Metro Denver had 10,214 residential properties listed for sale at the end of June, an 11.5% increase from May and a 68.3% increase from June 2023. In the past 13 months, the number of active listings has doubled.
“A once reliable market with a peak selling season in June has taken a detour. The main culprit of higher interest rates is easy to identify,” Libby Levinson-Katz, chairwoman of the DMAR Market Trends Committee and an area Realtor, said in comments accompanying the report.
The inventory surge happened even though new listings dropped 16.4% from May to 5,825. Rather than waiting until closer to when the new school year starts, the prime selling appears to have peaked early, in May.
Buyers, long starved for choice, haven’t had this many options in metro Denver since September 2013. But even with the big move, the active inventory remains below June’s historical average of about 15,500, based on records dating back to 1985.
Levison-Katz said the inventory stands at 2.78 months of supply, which is getting closer to the three months or more considered necessary for a “balanced” market. In June 2021, only 3,122 listings were available across a region of 2.9 million people.
Closings dropped 17.1% to 3,678, as fewer deals got done despite buyers having a wider selection. The median number of days listings spent on the market also rose by a third, from nine days to 12 days.
The cooling in the market was especially notable in homes priced at $1 million and above, noted Colleen Covell, a member of the DMAR Market Trends Committee.
“Sellers in this market will be left out of the summer fun unless they update their home before listing, price conservatively and expect to pay a closing concession. Otherwise, they will be sitting idle throughout the long dog days of summer,” Covell said in the report.
Defying the softening market, home prices continued to increase in June. The median price of a single-family home sold was $665,000, up 1.06% from May and 1.56% over the past year. The median sales price for condos and townhomes rose from $407,000 in May to $410,000 in June, but is down from $420,000 a year earlier as higher association fees drag down affordability.
With inflation softening and lower interest rates on the horizon, Levinson-Katz suggested buyers and sellers alike may be waiting to make their next move.
“It is possible that we are simply experiencing a calm before the storm. Many consumers are holding off until the fall to align with the projection of lower mortgage rates. While the market typically slows down ahead of a presidential election, we may find ourselves in the throes of a bustling market this election cycle,” she predicted.
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Originally Published: July 8, 2024 at 6:00 a.m.
