What Kind of Real Estate Hike Are You On?
Denver's market is at a plateau, not a downturn
Although we live in the very best outdoor state in the Country, not all of us stray too terribly far from the urban core – especially as the resources and the cost of living within them continue to expand. While I won’t fault you for not being “outdoorsy,” I will still ask that you reference a time when you did more than aggressively walk up an incline in your own neighborhood. A time when perhaps you ventured towards the mountains and actually got those designer hiking boots a little muddy. Surely you can imagine that any true hike has varying degrees of incline, conditions, moments where an ascent levels off and yes, a hiking partner that says, “I’m going to take a break … see you on your way back down.”
Much like a hike through the woods, each person’s relationship with real estate looks a little different as we climb different hills with varying degrees of proficiency and interest. It’s even quite likely that you yourself decided to take a breather mid-climb and may only now be on the trail again. Perhaps your hike is nothing more than a stroll around a lake while for others, summiting every 14er in the state is the only way to do it. Like these varying experiences, there are pockets of our city that are either very directly feeling the changes in the marketplace or have yet to see even the slightest change in grade. The news, speaking in an overall sense, is that we have collectively reached the top of this particular climb and the return to the base has begun. How steep of a descent it will be remains to be seen.
You’ve likely heard by now that the metro area’s real estate market is changing – and while we have substantial data to show the trend is heading down the trail, some areas – most notably the urban core – may be a few hours behind the more suburban areas on the rise. According to recent data from the Colorado Association of Realtors, the median price for the metro area actually declined in February. While city dwellers are still experiencing high offer volumes and lower days on market, the overall trend in our region is that of a summit that has not only been reached, but surpassed. The transition from February 2014 to 2015 saw our median price increase 16.27 percent – a staggering number and fortunately not one that was outdone every year. That said, the 9.83 percent from 2015 to 2016, and 11.31 percent from 2017 to 2018 is now dwarfed by the 0.17 percent decline seen just last month. While two tenths of a percent downward is far within a margin of error for no decline or increase, the trend of price appreciation could have reached its end and a much-needed stabilization or mid-hike rest has commenced.
What’s curious considering the pricing peaks and valleys along with the path back down the hill, figuratively speaking, is that the number of new listings and the number of sold properties continue to rise. February saw 13.7 percent more listings than last year and 8 percent more sales. There are more listings, more sales, more days on market and a shrinking price growth all indicative of stabilization, not a downturn. Our proverbial hiker may not be headed back down to meet his exhausted friend just yet, rather he is staying a little while to enjoy the view, see what’s left to explore at the top and maybe, just maybe slowly walk back down instead of run.