Denver Home Prices, Sales Slip in July
With the release of home sales and price data from July, some real estate professionals are seeing cause for concern.
The Denver metro area and other major cities throughout Colorado have been a focal point in news about the recent resurgence of the U.S. housing market. But with the release of home sales and price data from July, some real estate professionals are seeing cause for concern.
"The Denver area saw home prices and sales volume fall in July."
The Denver Post reported that within Denver County, the average price of a single-family home fell 2.4 percent between June and July, finishing at $560,150. Average condo prices dipped at a faster rate of 4.6 percent to $409,514. The number of homes and condos for sale in July also dropped noticeably, finishing the month more than 36 percent lower than July 2016.
According to some brokers and agents who spoke with the Post, including Matthew Leprino of the Denver brokerage Leprino Home, the numbers are somewhat alarming.
"That is an enormous drop in the average price for month over month," Leprino said. "That is the outlier, something that is not typical."
Kelly Moye, a real estate agent in the area, remarked that the data could indeed be a temporary aberration, but could be part of a trend that is nonetheless making sellers nervous.
"It is typical to have a seasonal slowdown every summer, but this summer has been slower than most and there is some speculation as to whether this is purely seasonal or may indicate a change in our fast-paced market," Moye said.
Sales decline nationally
Adding fuel to the speculative fire is recent data on national home sales activity. The National Association of Realtors reported July 24 that U.S. home sales were down 1.8 percent between May and June, more than the 1 percent forecasted by economists. On an annual basis, June homes for sale this year were 7.1 percent off the mark from the same month in 2016, making it the 25th consecutive month of inventory declines.
Reuters noted that economists are generally in agreement that as housing inventory continues to decline, it should keep causing a growth in home prices. The median price of a house nationally rose 6.5 percent on a yearly basis in June, to $263,800.
That begs the question of why the Denver housing market seems to have taken a beating in July. According to the Post, the most likely explanation helps understand why the city's July numbers probably aren't worth losing sleep over.
For one, June has historically been the biggest month of the year for real estate sales activity, so a month-to-month decline in July is not unheard of. Real estate agents have also found that the peak selling season has been ending earlier as school districts invite students back sooner in August and listings pull back in response.
The price decline seen in Denver could also be a statistical fluke. According to Leprino, listing prices seem to have been falling more on pricey, high-end properties rather than more affordable homes. This would cause the data to show a bigger average price decline than what most sellers are really experiencing. Leprino told the Post that homes near the middle and low-end of the price spectrum are still selling in near-record time, and with multiple offers above list price.
This is all to say that while July might have looked bad on paper for the Denver housing market, it is still too early to say that the bubble has burst, if there even was a bubble in the first place. This spells good news for those still looking to sell, but makes things a little more difficult for buyers on the other side of the deal.
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