Business

Denver Home Sales Down Despite Lower Prices

The five-bedroom, three-bathroom, 2,956 square-foot home at 3553 South Grape Street is listed at $745,000, slightly above the new average price for a detached house in metro Denver.
The five-bedroom, three-bathroom, 2,956 square-foot home at 3553 South Grape Street is listed at $745,000, slightly above the new average price for a detached house in metro Denver. Google Maps
Last month, the Denver Metro Association of Realtors reported that home sales in the area were finally shifting in the direction of a buyer's market following a long period of bidding wars and rising prices — and its latest update indicates that this trend could be growing. But less severe sticker shock hasn't prevented overall sales from falling.

One possible reason: While the average cost of a detached home in the metro area in August tumbled by more than $30,000, to just shy of $745,000, the median price of $645,000 represents a dip of less than 1 percent.

The 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 August, the average price for a detached home in this area settled at $744,589, down from the adjusted figure of $778,793 in July. But the median price slid from $650,000 in July to $645,000 in August, a decline of just 0.77 percent.

Clues regarding this modest drop can be found in other DMAR stats. For example, new listings in August numbered 3,694, an 18.92 percent slide from the 4,556 in July. Likewise, active listings at the end of August numbered 5,298, compared to 5,650 through July, indicating an effort by sellers to strike a balance between supply and demand. But the 2,944 closed sales in August still marks a decrease from the 3,147 in July.

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

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.

Meanwhile, the average number of days that detached homes lingered on the Multiple Listings Service, or MLS, was twenty in August, nearly a week more than the fourteen in July, and the median stay ratcheted from seven days in July to twelve in August. Even more significant: The typical closed price last month was 99.16 percent of list, the first time that figure has been under 100 percent in at least a year.

Andrew Abrams, a local realtor who chairs the DMAR market-trends committee, isn't panicked by these developments. "While some individuals will take this as a sign that the real estate market is about to crash, Denver Metro has seasonality in its market and this is an example of that," he stresses in a statement, but acknowledges that "with so much instability in the economy and the world as a whole, it is difficult to forecast how the housing economy will be impacted. Interest rates are still the biggest factor in their impact on buyer demand as it is a direct correlation to monthly payments. As the Fed continues to fight inflation, interest rates will continue to be a conversation topic."

Click to read the Denver Metro Association of Realtors' September 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