After years of familiar headlines in Denver Real Estate data, 2018 brought some interesting twists and turns to the narrative. We've cracked open our market report archives to tell the story of last year, and to predict what 2019 has in store for Denver's real estate market.
Should you worry about this year's Denver real estate market? According to Inman's Chief Economist, Matthew Gardner, œAfter several years of above-average economic and home price growth, 2018 marked the start of a slowdown in the residential real estate market [...] In 2019 I expect prices to continue rising, but at a slower rate as we move toward a more balanced housing market.
The same can be said for the Denver market, with solid gains year over year in home equity and a slight lifting of the Metro area's listing shortage. If we boiled the year down to a headline, it would read something like: The Rumors of Denver's Real Estate Market Demise Were Greatly Exaggerated. As it turns out, some early signs of market change ended up mirroring seasonal patterns that came a month sooner than expected while other signs hinted at the incremental easing of the intense seller's market Denver had been experiencing. All market stats from 2018 point to a healthy real estate market in 2019 that still favors sellers, but gives buyers some relief in the form of more home inventory.
The 2018 Denver Real Estate Market, In Review
Our monthly Denver market report headlines for 2018 paint the same picture. You'll see that we noticed a change toward the beginning of the year and confirmed a healthy real estate market where buyers had a bit more room to breathe toward the end:
January - "With Less Homes Sold, Are We on the Brink of a Real Estate Slow Down?"
January's numbers certainly indicated the holiday season, with a slowing in sold homes (-13%), as compared to December of 2017.
February - "Denver's Listing Shortage"
Denver's listing shortage continued to take hold of the residential real estate market propelling the inflation of home values (reaching an average of $449,429 for both attached and detached homes in February). That was almost a 12% increase since January of 2017!
March - "This Home Value Milestone Could Change the Face of Denver"
In March of 2018, the average Denver single family home price exceeded half a million dollars. This local milestone representedyears worth of equity climbs, low inventory, and the changing Mile High City as a whole.
April - "Spring Brings Warming Housing Market"
In April, home prices continued to climb. The average single family home clocked in at $522,277. This price tag represented a whopping 12% increase since March of 2017 (almost double metro Denver's historical average).
May - "A Change is Coming to Denver Real Estate"
Despite a healthy increase of inventory since April, homes on the Denver market had decreased in quantity by almost 4% since May of 2017. Given the lack of Denver homes for sale early in 2018, this was no surprise and likely drove the average home price to another historical high ($543,058 for detached homes and $487,082 for both attached and detached); with low supply comes higher prices. Meanwhile, mortgage interest rates were slowly rising. Though the Denver real estate market hadn't seen the impact of higher interest rates at this point, we expected this factor to reveal its impact by spring of 2019
June - "Why Didn't The Average Home Price Increase This Month?"
June 2018's Denver real estate data suggested that the œsummer slow down had, in fact, arrived before summer! In May, the average home price plateaued as compared to April ($540,624 for detached homes, and $356,337 for attached), showing a fraction of a percent ofdifference. Additionally, DMAR reported a drop in multiple offers for homes on the market.
July - "Is Denver in for a Seasonal Shift or a Sustained Market Slowdown?"
July's Denver real estate numbers showed a continued balancing of the market - an incremental slow-down, if you will. Though summer shifts the market a bit closer to buyers' corners every year, the marked year over year variations tended to indicate that some type of change was in store.
August - "3 new stats that prove it's a great time to buy in Denver"
In August, buyers had more choices and less competition than just a few months prior. Over the previous several months, the residential real estate market had been incrementally cooling (typical of mid-summer), providing a bit more opportunity for buyers.
September - "The best real estate buying window all year"
The September market report for Denver real estate featured buyer-friendly stats... at least when considering Denver's extreme seller's market (it was all relative, right?) The impressive increase in homes on the market - when taken with the decrease in homes sold - painted the picture of a great opportunity for buyers in Denver's crazy seller's market.
October - "Has the end of Denver's listing shortage Arrived?"
October's stats painted a new real estate picture - inventory had increased and sales had decreased. The Denver housing market teeter totter (where the supply seat hovered inches from the ground and the demand seat rocketed toward the sky) had started to level. It appeared that rising interest rates had finally made their appearance.
November - "Ignore the Frantic Denver Real Estate Disinformation"
November's stats echoed the sentiments of October - the Denver real estate market was steadily moving toward more balance between buyers and sellers. As some pressures lifted from the shoulders of buyers and as sellers experienced less of a frenzy around their listings, the city was all abuzz about how the real estate market was turning on its head. But we cautioned readers not to mind the hoopla Denver was still a seller's market and property values continued to rise.
December - "Denver is Still a Seller's Market but Here's What Changed"
The Denver real estate market appeared to be continuing its incremental approach toward a balanced market. The average home price in December of 2018 was $505,990, representing a 5% home value increase over the previous year.
Live Urban Real Estate's Managing Broker, Jana Miller, explains 2018's local market; œLive Urban brokers continued to work with sellers throughout the year to make their homes stand out and garner top dollar. Our "Price it right, sell it quickly" approach served our sellers well in the somewhat schizophrenic 2018 market. Meanwhile, Live Urban buyer agents quickly capitalized on more inventory to find opportunities to get buyers into their dream homes, and they continuedto do so over the holiday season. Live Urban experienced another record year in sales volume.
A 2019 Prediction, Backed By Stats
John Skrabec, President of Live Urban Real Estate, expressed his optimism for Denver real estate in 2019; œBased on economic and housing projections, I expect Denver's real estate market prices to continue to rise through 2019, albeit at a slower rate than we've experienced in the last several years. Denver's robust economy and desirable lifestyle will continue to drive an increase of value in our local housing market. It's important to remember the basic fundamentals for a growing real estate market are still in place. Inventory remains low while existing homeowners are reluctant to sell. At the same time, we're not able to build enough new homes to meet continued demand.
Rising interest rates will have a slight impact on sales. And recent announcements from the Federal Reserve signal a measured and cautious approach about future increases.
I expect the market to continue to favor sellers, with a moderate increase in prices, and less competition between buyers.
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