Market watchers predict Denver-area housing sales will slow but prices will continue to rise next year.
In its 2019 housing forecast, the National Association of Realtors’ Realtor.com predicted this week that sales would drop 6.7 percent and prices would rise 6.8 percent in and around Denver. Nationally, existing home sales were expected to inch down 2.2 percent and prices to edge up 2.2 percent.
Mortgage rates were expected to reach 5.5 percent by the end of this year, pushing monthly mortgage payments up 8 percent and “putting home ownership more out of reach especially for younger … and other first-time home buyers,” according to the Realtor.com report.
Trulia, another residential real estate web site, also noted the mortgage rate trajectory.
“Mortgage rates on 30-year, fixed rate loans have been less than 5 percent since the end of the recession, helping to buoy housing demand and keep monthly payments relatively cheap even as prices themselves rose,” according to Trulia senior economist Cheryl Young, writing in a forecast released this week . “But those record-low rates will come to an end in 2019. Rising mortgage rates will take a bite out of affordability on top of an already supply-constrained and high-priced housing market.”
Trulia housing economist Felipe Chacon added that Denver has a history of diverging from national trends.
“Home value appreciation in the Denver metro had been consistently outpacing the national average since the housing market bottomed out after the recession. In early 2018 though, this trend flipped, with appreciation in Denver continuing to slow and the national rate holding steady,” Chacon said.
An October report from another real estate company, RE/MAX, put the median sales price of a Denver home at $398,500, up 6.27 percent since last year. Nationally, RE/MAX found the median sales price for October was $236,000, up 4.9 percent.
Trulia’s Chacon said Denver home values were expected to continue to grow in 2019, though at a slower pace. Trulia pegged appreciation at 6.9 percent in Denver in October. But neighborhoods varied, with Athmar Park seeing a 13.1 percent year-over-year growth and Whittier 11.5 percent, compared to 4.4 percent for Cherry Creek. Chacon added Cherry Creek was considerably more expensive than metro Denver generally to begin with and might be slowing along with the broader luxury market.