Home Sales Drop as Colorado Housing Market Struggles
A snapshot of the state's local market conditions
Single-family home sales across the state fell more than 14% from August to September but remain up 9.1% over September 2018 in the seven-county Denver metro area and up 5.3% statewide, according to the latest monthly market data from the Colorado Association of Realtors.
As expected, new listings are down seasonally, and overall inventory remains a significant issue statewide. Yet, continued buyer demand has kept median and average sales prices relatively flat. In general, homes are sitting on the market a few days longer and sellers are having to adjust pricing and/or make concessions to get the sale across the finish line.
The median price of a single-family home in the metro-Denver region fell $4,100 to $439,900 over the past month but remains up 6% over the same time last year. Statewide, the median price of a single-family home fell 1.2% ($5000) to $400,000 in September, but also remains up 6.7% over September 2018.
The median price of a condo/townhome ticked up slightly to $315,000 for both the Denver-metro area and statewide, and both remain up 3.3% over last year.
The September 2019 average days-on-market reflected buyers’ patience and demands with single-family homes in the Denver-metro area on the market an average of 35 days in September, up nearly 10% from September and 16.7% over last year. Condo/townhomes slipped one day from 35 to 34 average days on market from August to September but was up nearly 26% over September 2018.
Statewide, single-family homes and condo/townhomes were on the market an average of 47 days, up 6.8% from August to September 2019. However, condo/townhomes average days on market were up nearly 24% year-over-year.
Taking a look at some of the state’s local market conditions, Colorado Association of Realtors market trends spokespersons provided the following assessments:
Aurora and Centennial
“Although we keep hearing inventory for single-family residential homes and condos is up throughout the metro area, Aurora is showing a different set of numbers. Almost every zip code in Aurora and Centennial has fewer active homes for sale when compared to a year ago," says Aurora-area realtor Sunny Banka. "That said, sellers still need to be pricing property appropriately. We see a number of price reductions on a daily basis. The median sales price is also up between 1% and 9% depending on the zip code area. Currently, you can expect to pay a median price of $385,000 for single-family residential homes in Aurora and $481,500 in Centennial."
Boulder and Broomfield
“Looking at Boulder County, one wonders if this is that sweet spot between a seller’s market and a buyer’s market, the one that never seems to last long and is only apparent in hindsight," says Boulder-area realtor Kelly Moye. “Broomfield County has been moving and shaking all year and the fall shows more of the same. An increase of 14 percent more listings was met with a 19 percent sales increase. The mix of affordable houses, great schools and proximity between Boulder and Denver seems to be driving this market, which still remains one that favors sellers."
Colorado Springs and Pikes Peak Area
“The economic winds of change are not changing. September continued to be a record-setting month as we watched new listings drop while pending sales increased. Not a good scenario if you are trying to buy, which of course then lead to an increase in median price to $325,000 in the single-family home market and the townhome/condo market was up 7.9%," says Colorado Springs-area realtor Patrick Muldoon. "It is like Groundhog Day every time we discuss this Front Range market."
“What comes next is anyone’s guess. Stay tuned because one of these days we may see a reverse here in housing. But until then, buyers are getting great interest rates and sellers are getting top dollar. I am not sure if that is a win-win, but it’s what we have at this time,” Muldoon says.
Many wonder this time of year if the seasonal real estate cooling is just that, or is there more to the story. The answer is the latter as the gap between new homes to the market and sold ones continue to widen this September.
In September 2016, there was a 162-home spread. That number widened in 2017 to 195, 265 in 2018 and this September, there was a 248-home gap difference between the two figures. What does that mean for consumers? Well, simply put, more inventory.
When there are either more homes arriving than selling or less selling of those currently available, the result is an increasing inventory, which in-and-of-itself slows home appreciation, a direct result of demand. This is further demonstrated in Denver this month as the average days on market, unchanged 2016 to 2018, recognized a 45% increase. While this information alone does not trigger doomsday theorists battle plans, it does point to the inevitable change from a seller’s market to a buyer’s market.
“Total residential sales numbers in La Plata County were up significantly in September of 2019 when compared to 2018 but are flat when comparing year-to-date numbers," says Durango-area realtor Jarrod Nixon. "Last year, Durango and the surrounding area were recovering from the 416 Fire, thus comparing one year to the last doesn’t fairly represent true market conditions. With showing activity decreasing with traditional seasonal fluctuation enhanced by a slowing market, buyers are starting to see home pricing softening in some segments. With many homes currently pending, the year will finish well, although different from our robust past years."
"Clearly, housing affordability in northern Larimer County continues to worsen as the number of homes sold for less than $300,000 totaled just 652 units – a bit more than half the total number of homes sold in the next price bracket," says Fort Collins-area realtor Chris Hardy. "Homes on the market right now are likely selling for less than they would have during the spring – so even though there’s less than three months of inventory on the market, now may be a great time to look at properties that haven’t sold and may be ripe for a price reduction."
“Although it remains a seller’s market, it is a little softer. Along with the seasonal slowdown, sellers will need to price their home correctly for it to move quicker. Well priced homes with nice upgrades and a great location are still moving quickly, yet others in the same neighborhood with average amenities are sitting on the market for months. With low interest rates there are buyers in the market however, they are analyzing all of the information and making sure the home they purchase is the best fit for them,” says Golden- and Arvada-area realtor Barb Ecker.
“Although inventory is still tight, listings in Mesa County are up 12.8% month-over-month but down 0.6% year-over-year. Sales are also up 4.4% month-over-month but are down 4.5% year-over-year. Our median price of $263,250 for Mesa County is definitely outside of the affordable price range, and the average sale price is up 15.5% to $300,112,” says Grand Junction-area realtor Ann Hayes.
“Despite its ups and downs, the Pueblo real estate market remained strong through September," says Pueblo-area realtor David Anderson. "Although new home permits are increasing, we remain short on housing inventory as builders aren’t able to build fast enough to meet demand."
“The summer selling season wrapped with a good solid performance in September. The macro economic factors tend to drive the upper niches as inventories are significant in certain price points which may be opportunities for buyers," says Vail-area realtor Mike Budd. “The inventory on townhome/condos is at 5.2 months of supply while single family/duplex is 7.7 months. Both categories are at historically low levels however, the variability by pricing niche is quite significant. This variance could be a buying opportunity."