The number of homes for sale under $500,000 has dropped so significantly in the Denver area that the Denver Metro Association of Realtors has quit analyzing that home price range entirely in its monthly market trend reports.
According to the organization, there's just not enough data.
No doubt, that market has shrunk. Last month, just 450 homes -- including houses, condos, duplexes and townhouses -- closed in that price range. That's down by 807 closings in May of 2022.
In short, people living in the metro making the median income cannot afford to buy all but a handful of properties.
So how much actual income would a household need to buy a $500,000 property without being cost-burdened (spending more than 30% of its income on housing costs)?
If you had $100,000 saved up for a down payment, your household would need to make nearly $129,000 a year, according to the Re:Colorado housing affordability calculator.
For a three-person household, $129,000 is just over 122% of the area median income. For an individual trying to buy a $500,000 home, a person would need to make more than 156% of the area median income.
Low-to-moderate income families have been largely iced out of the market, unless they have access to some sort of government subsidies or take on an extreme amount of debt.
Rarely is income-restricted housing available to making more than 80% of the area median income.
Yet home prices are down.
The median sales price for a home in May was $595,000. That's nearly 29% cheaper than this month in 2022.
In May, 4,167 homes sold in 11-county Denver metro, including Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park counties. That represents $2.91 billion in sales for the industry.
There were 1,728 homes closed that cost between $500,000 and $750,000; 2,338 between $750,000 and $999,999; and 1,811 over $1 million.
The condo market in Downtown Denver has slowed, as demand for ranch homes in south metro Denver has risen, according to the report.
The metro real estate market "feels off."
That's according to Libby Levinson-Katz, the chair of the Denver Metro Area Realtors Market Trends Committee.
Spring, which typically offers a boost in real estate activity, saw little enthusiasm from buyers, whom are being more selective than before. Sellers, on the other hand, are offering more concessions.
"Denver ranked fifth nationwide for the number of sellers who offered concessions at closing, with 56.1 percent of transactions involving seller concessions," the report stated.
And people are holding onto their homes.
"While new listings rose 8.87 percent month-over-month to 5,180, we are still down 23.94 percent from last year when we had 6,810 listings," wrote Levinson-Katz.
Over the past 10 years, the typical number of homes on the market tends to be in the mid-7000.
"Due to the lack of inventory, buyers are experiencing a bit of fatigue as they wait for either the perfect home or to uncover a good deal," she wrote. "When finding the right house, buyers are moving a bit more slowly."
Sellers, in turn, are more likely to address inspection issues than in recent years.
"Real estate continues to be very neighborhood specific, especially for single-family homes," Levinson-Katz wrote. "Two similar homes in different areas of town can perform widely differently, where one will receive multiple offers selling to the highest bidder and the other may linger on the market with multiple price reductions."
