After a sustained steady march upward, housing prices may finally be showing signs of slowing down across metro Denver.
A new report from the Denver Metro Association of Realtors says the median closing price for a residential home fell at the end of May compared to the previous month. That number stands at $615,000. It’s just a one-quarter percent drop in prices, but it could mean that rising inflation — and the higher interest rates that federal regulators are trying to use to combat it — is depressing demand for homes as money gets more expensive to borrow. Adding to the price changes, the realtors also report that the number of active listings for residential home sales was up nearly 14 percent over the last month. And more than 8 percent of listings dropped their asking price for a home before getting an offer. That’s up slightly from this time last year when it was around 7 percent.
“After consecutive months of appreciation, negotiations and bidding wars, seeing modest numbers is a sign that the market has come back to earth,” said Andrew Abrams, a realtor in Denver and an official with the association of realtors. “The Denver Metro’s housing market will be the story of two halves. The first of the year with unprecedented appreciation and the second half of the year with a return to normalization.”
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The report says homebuyers and sellers have not really seen the effects higher mortgage interest rates will likely have on prices yet, and that they don’t expect that to alter prices until after the summer. They say demand for mortgages has slipped to its lowest level since December 2018, brought on by higher mortgage rates, which have increased the cost of buying a home by 25 percent from a year ago.
Though the rise in home prices may be slowing, people looking to buy a home in Denver are still finding far higher prices than they did a year ago: The median closing price for a residential home in metro Denver was up more than 14 percent from a year ago. And the homes that are on the market are still selling quickly: The average number of days a home sits on the market before going under contract in metro Denver was nine.
The monthly report looks at housing prices in 11 counties in metro Denver.