In August, the average home price in the Mile High City blew past $600,000 for the first time. While that mark wasn't quite eclipsed in September, the situation definitely hasn't improved. According to the latest market trends report from the Denver Metro Association of Realtors, house hunters are facing "the toughest market to buy a home in metro Denver's history."
The reason, once again, is demand that is far outstripping supply. DMAR notes that the 5,301 active listings at the end of last month represented the lowest inventory for any September on record by 2,215 properties.
This put pressure on prices. The average closing cost for a detached home was $599,418 in September, down less than half a percent from the $602,264 registered in August. But homes continue to be purchased at a feverish clip. The average number of days they were on the market was just 22 in September, down from 23 in August and sixteen in September 2019. The median number of days on the market is even lower: just six days.
This graphic shows the steady upward trend in average home prices over the past year:
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The inventory problem is particularly acute when it comes to available homes between $300,000 and $499,999 — an amount more accessible to first-time buyers.
In September 2019, there were 2,240 listings in this range. A year later, that number was down to 2,141, a decrease of just under 5 percent. No wonder the ones available were snapped up so quickly: Their average time on the market was just twelve days, as compared to fifteen in August and 27 a year earlier.
DMAR market trends committee chair Andrew Abrams describes the shortage of listings this way: "Home sellers are hesitant to sell as the thought of moving and logistics of that process may feel daunting during a pandemic. The majority of sellers have enough equity to not feel pressured about what will happen with the market if there is a shift in the near future. Homebuyers, on the other hand, may be spending a great deal more time at home and realizing they want more space, while also looking to take advantage of the low interest rates."
This scenario could moderate during the fall and winter months, when the Denver market typically cools down. Then again, conventional wisdom has fallen by the wayside in the metro area during the age of COVID-19.