Metro Denver Housing Market Sees Slowdown in November
As the holiday season approaches, the housing market in Metro Denver typically experiences a slowdown. For the second consecutive year, November saw a significant decrease in both new listings and sales, according to the latest monthly update from the Denver Metro Association of Realtors.
Last month, sellers listed 2,620 homes on the market, marking a 41.4% decrease from the 4,470 homes listed in October. Year-over-year, new listings have declined by 4.6%. In comparison, a year ago, there was a similar monthly drop of 41.5%, with an annual increase of 1%.
Buyers are also showing restraint, with closings dropping by 23.4% month-over-month and 13.2% year-over-year in November. This contrasts with previous Novembers, which saw monthly declines of around 16%.
With new listings decreasing more than sales, the inventory of homes and condos on the market fell by 15.9% in November to 10,506. However, the inventory remains 12.8% higher than the same month last year.
While some may interpret these soft numbers as concerning, the report suggests that it reflects a market taking its customary seasonal break.
“It’s not that sellers lack the desire to sell their current homes and move, but rather they are hesitant to give up their current low APR mortgage rates for potentially higher rates,” explained Susan Thayer, a member of the DMAR Market Trends Committee and a local Realtor.
Similarly, potential homebuyers may be more cautious due to concerns about the state of the economy rather than the homebuying process itself.
Thayer added, “Sellers who are motivated to sell and price their homes competitively will find that there are still plenty of buyers in the market, even in the higher price ranges.”
In November, listings spent a median of 36 days on the market, up from 28 days the previous year. While attracting buyers remains a challenge, sellers in Denver faced a higher rate of pending sales contract cancellations in October compared to the national average, according to Redfin.
Aside from economic uncertainties, buyers may also be sensing a potential shift in home prices. The median price of a single-family home sold in November was $640,000, representing a 1.5% decrease from the previous month and a 0.8% increase from the previous year.
Conversely, condo and townhome prices experienced a more significant decline, with prices down 2% monthly and 7.3% annually to $380,000. Factors such as higher HOA fees and stricter borrowing requirements have made attached properties less attractive, despite their initial affordability.
When considering the decrease in sales and the mix of homes sold, November’s sales volume dropped by 25.6% from October and 11.3% from the previous year.
The slowdown observed in Denver mirrors trends seen in other markets. The annualized rate of existing home sales in the U.S. remained steady at 4.1 million in October, similar to September’s rate of 4.05 million.
Economist Elliot Eisenberg noted, “This level of activity is reminiscent of October 2008 during the Housing Bust, indicating a 20% decline from the peak in 2021. The share of the U.S. population identifying as middle class has also decreased significantly over the past decade.”
Overall, while the market may be experiencing a temporary slowdown, there are still opportunities for both buyers and sellers to navigate the current landscape effectively.
