We Have Reached Cruising Altitude
This moment resembles where Denver’s 2018 housing market leaves us and the 2019 journey begins
You know the moment: You're about 15 minutes into your flight – you've grabbed your tablet or magazine and you are settling in to your voyage. The seatbelt light is still on and the pilot has yet to make the obligatory, '"We've reached cruising altitude," message, but you can feel the leveling out as you pull your headphones out of your bag. The plane is no longer climbing; the engines strain just a little less and the turbulence, at least for the foreseeable future, becomes minimal. This moment, ladies and gentlemen, resembles where Denver’s 2018 housing market leaves us and the 2019 journey begins.
According to new data provided by the Colorado Association of REALTORS® November report, this past month was the first in the past five Novembers in which more properties in the metro area arrived on the market than were sold. While the number is a modest 29, it differs from November 2017 where the opposite occurred: 907 more properties sold than came on the market. This sum represents a changing landscape that in no way resembles the feared housing market bubble but rather a time where we may just be able to take our seat belts off and stretch our legs.
The findings are also significant because for the first time in a while, we have evidence that, while demand remains high, there are simply less transactions taking place. One could argue that November is always a slower month – and they’d be right – but they would also have to look at the availability of these homes over the same month, year-over-year.
Another key statistic is the Months Supply of Inventory, which also paints a revealing picture: one that, within a margin of error, shows that we have precisely the same amount of inventory as we did in November 2016 and 2014. While not a reflection of the number of houses available per se, it reveals the number of homes available in relation to demand. With small dips in 2017 and 2015, we can clearly see that while an inventory-to-sale ratio decrease is occurring at the same time as an inventory-to-demand stagnation, buyers are still wanting houses, but simply aren’t buying them. Again, this change flies in the face of evidence of a downturn or radical change in our housing market altitude, and rather toward a simple, predictable market correction.
The coming year will show us just how much of a correction and also how long we can expect it to take. In the meantime, one thing we can take away from this flight path is these indicators point to smoother skies … to a new market where the seller may be on market a little longer and a buyer may actually be able to see a few houses while thinking overnight before acting.
Demand remaining high while not necessarily backed with an insatiable need could, over the next year, spell a new market for the Denver metro area. A calm, minimal turbulence, and breathtaking 12-month period where buyers and sellers adjust their expectations and the REALTOR® can again advocate without their feet to the fire on behalf of more harmonious parties.