The Denver real estate market has been pretty hot over the last couple of years, with fierce competition and steadily rising home values. But now, industry reports suggest that things could be cooling down a bit. Here are the latest trends and forecasts for the Denver housing market, stretching into 2018.
The Denver Housing Market in 2018
Housing inventory remains tight across the Denver metro area, forcing home buyers to compete for limited supply. As a result, properties are selling quickly and often for the full asking price (if not more).
But economists and housing analysts are reporting the signs of what could be a cooling trend within the real estate market.
In September 2017, the Denver Post published an updated housing market report citing data provided by the local Realtors association. According to that article:
“Metro Denver’s heated housing market continued to show signs of cooling in August , with single-family home sales and median home prices dropping for a second month…”
From July to August 2017, the median price for a single-family property in the Denver area actually dropped a bit to land at $410,000. But compared to the same month last year, home prices in August were up 7.9%.
So while we are still seeing year-over-year gains for local house values, there are also signs of a cooling trend within the Denver housing market.
A cool-down is also evident when you look at the number of houses sold across the metro area in recent months. According to the Denver Metro Association of Realtors (DMAR), single-family home sales dropped 8.7% from July to August of 2017, and were down 10.6% from a year ago.
A Return to Normalcy?
In terms of annual home-price appreciation, the Denver real estate market might be returning to “normal.” Inventory is still below average, forcing home buyers to compete fiercely for the most desirable properties. But in terms of year-over-year price gains, we are starting to see some normalization within the Denver area housing market.
Stephen Danyliw, chairman of the DMAR Trends Committee, recently stated: “Overall, I feel positive about this market even though we are transitioning toward something that looks more normal.”
Still, home buyers will need to bring their ‘A’ game when entering the Denver real estate market in 2017 or 2018. Even with a potential slowdown in price growth, this market will remain highly competitive for the foreseeable future. This is largely due to an imbalance between supply and demand.
In July, Denver was reported to have a meager 1.5-month supply of homes for sale. A “balanced” real estate markets is said to have somewhere between 5 to 6 months of supply, according to experts. This means that the Denver real estate market still favors sellers over buyers, especially where inventory is concerned. And it could remain predominantly a seller’s market through the end of 2017 and into 2018.
What Home Buyers Should Know
You don’t have to be an economist to realize that housing costs in Denver are rising. Even with a forecasted slowdown in home-value appreciation, buyers who postpone their purchases until 2018 will likely pay more for a house.
And then there are mortgage rates to consider. The average rate for a 30-year fixed home loan was 3.78% during the second week of September. But they could rise over the coming months. In fact, a recently updated forecast from the Mortgage Bankers Association showed that the industry group expects rates to rise gradually through the end of this year and into next.
The bottom line: No one can predict with certainty what the Denver real estate market will look like in 2018. But given current trends, it’s likely that housing costs will continue to rise. So a strong case could be made for buying a home sooner rather than later.
Disclaimer: This article contains data, trends and forecasts for the Denver housing market that were provided by third parties not associated with our company. We have gathered and presented them here as an educational service to our readers.