Denver Average Home Price Up Despite Signs of Buyer's Market: WTF?

This four-bedroom, three-bathroom, 1,893-square-foot home at 4819 King Street is listed at $745,000, down from an original price of $820,000.
This four-bedroom, three-bathroom, 1,893-square-foot home at 4819 King Street is listed at $745,000, down from an original price of $820,000.
Most stats in the just-released October market-trends report from the Denver Metro Association of Realtors point to a shift to a buyer's market after a long period of rising prices and bidding wars. And yet the average price of a detached house in the metro area actually rose from last month, bumping above $745,000.

This anomaly is contradicted by a decrease in the median-home price, which went from $645,000 in August to $632,000 in September, the most recent month for which figures are available. The disconnect indicates just how difficult it is to predict where the Denver real estate scene is heading for house-hunters and realtors alike.

The DMAR survey focuses on greater Denver, an eleven-county zone that includes the core metro counties as well as contiguous counties such as Gilpin, Clear Creek, Park and Elbert. In September, the average price for a detached home in this area settled at $745,947, up 0.28 percent from the adjusted figure of $743,882 in August, and 8.02 percent more than the $690,541 average price a year ago. Likewise, the $632,000 median price is up 9.72 percent over last year, even though it fell last month.

Despite that drop, September saw a greater number of new listings (3,772) than did August (3,693). There were also more active listings lingering at the end of last month (5,798) compared to the previous one (5,298); both numbers are much higher than the 2,803 listings at the end of September 2021. A likely reason: The total of 2,924 closed sales in September was down 2.14 percent by month and 14.10 percent by year.

Such developments are relatively commonplace in early autumn on the Front Range. Nonetheless, a graphic from the report built with figures from January 2008 to July 2022 reveals that, prior to July, active listings at the end of the month hadn't exceeded the closings total in two years.

The yellow line corresponds to active listings at the end of each month, while the blue line shows sales that closed over the same periods:
The average cost of a detached home in Denver surpassed $700,000 for the first time in May 2021, en route to a record-setting $728,385 in June. That was followed by some back-and-forth slippage: $687,176 in July, $685,832 in August, $688,629 in September and $684,700 in October.

But in both November and December, the average again broke the $700,000 barrier, landing at $704,716 at the end of the year before descending to $688,127 in January 2022. This drop proved short-lived, however: The February 2022 average, adjusted to $738,472, was the highest ever recorded by the DMAR, and March hit $793,836. But April's $825,073 figure left that in the dust, and a dip in May to $803,835 was followed quickly by a bump of more than $3,000 in June prior to lower prices in July and August.

The unexpected increase in September took place even though the average number of days that detached homes hung around on the Multiple Listings Service, or MLS, climbed to 28, eight more than in August. Meanwhile, the median stay ratcheted from twelve days in August to eighteen last month, and the typical closing price was 98.70 percent of list, the lowest it's been in at least a year.

Libby Levinson-Katz, chair of the DMAR market-trends committee as well as a local realtor, avoids using the "buyer's market" label when describing what's happening now, instead choosing a more even-handed term.

"I believe we are moving toward a balanced market, which we haven’t seen in over sixteen years," she states. "A traditional cycle for the Denver real estate market is seven years. Due to an economic crash and a global pandemic, the cycles were extended, but a correction is needed. The market is entering a period of neutrality, where the bullish ways of extreme markets make way for a stage of compromise, with buyers and sellers working together for a win-win experience."

Click to read the Denver Metro Association of Realtors' October 2022 market-trends report.
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Michael Roberts has written for Westword since October 1990, serving stints as music editor and media columnist. He currently covers everything from breaking news and politics to sports and stories that defy categorization.
Contact: Michael Roberts

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