There are more homes for sale in Denver now than there were before the pandemic, in 2019, as hundreds of listings are piling up in the market amid buyers’ apparent indifference.
While prices have begun to slide, they remain much higher than they were five years ago—suggesting that the vast majority of homes on the market may still be unaffordable for many buyers in the city already struggling with high mortgage rates and growing housing costs.
Why It Matters
Denver’s housing market exploded during the pandemic, when the nationwide homebuying frenzy spurred by historically low mortgage rates found fertile ground in the city. In the past five years, however, inventory dried up, and mile-high home prices and high mortgage rates have pushed homeownership out of the reach of many locals.
Now, however, things are starting to change. Inventory is finally growing again, as sellers who were waiting for lower mortgage rates have accepted that the situation might not change anytime soon. In Denver, listings are now above pre-pandemic norms, suggesting that prices might soon come down as buyers acquire more negotiating power.
What To Know
Inventory is on the rise in Denver, but sales are not keeping up.
According to the Denver Metro Association of Realtors (DMAR), there were 13,599 active listings in the city in May, up 13.67 percent from a month earlier and the highest number since 2011. New listings, at 7,284, went up by 3.14 percent.
While pending sales were also on the rise month-over-month by 6.88 percent at 4,349, the number of closed sales was actually down 2.63 percent at 4,036. Sales volume, at $2.91 billion, was down by 2.44 percent.
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The homes that sold spent an average of 13 days on the market, which indicates that, despite dwindling demand, the Denver market is still competitive. However, the Denverite reported that the homes that didn’t sell were spending an average 45 days on the market before going under contract—much longer, and yet not enough to be considered stale.
These data suggest that there are still buyers in the Denver market, but drastically fewer than in the past five years. Those buying in the city right now are those who can afford it: the median close price for a Denver home in May was $600,000, down 0.66 percent from a month earlier. In April 2019, the median sale price of a home was about $438,000.
What People Are Saying
Susan Thayer, market trends committee member for DMAR and founder of The Thayer Group, previously told Newsweek: “Traditionally, the spring also sees an increase in purchases, so much of that increase in inventory is also met with a slight increase in sales. This year, because of elevated mortgage rates, economic uncertainty, rises in homeowner’s insurance premiums and rising home values, we are not seeing buyers enter the market as quickly as sellers did.”
She added: “Inventory is elevating, while sales are staying at pre-spring season levels resulting in more inventory of active listings compared to the previous five to seven years.”
Hannah Jones, senior economics research analyst at Realtor.com, previously told Newsweek: “Still-high housing costs in Denver have sidelined many would-be buyers, which has allowed inventory to build up in the metro.”
Nick Gerli, CEO of Reventure App, previously told Newsweek: “This spike is unprecedented because no other large metro area in America has experienced such a massive spike in inventory compared to long-run norms.”
Amanda Snitker, a real estate agent with Coldwell Banker and chair of DMAR’ market trends committee, told Realtor.com of Denver: “It’s a really great place for a lot of different types of people to live and have a great quality of life, so it appeals to a very broad range. But the costs are challenging.”
Keri Duffy, broker at Kentwood Real Estate and DMAR market trends committee member, told Realtor.com of sellers in the city: “If you overprice it, you’re deleted—like you don’t come back, even if with a price change. You don’t necessarily come back to the buyer pools with a fresh set of eyes. People just no longer see your home.”
What Happens Next
The current imbalance between sellers and buyers in the Denver market is likely to continue bringing prices down in the city, though experts disagree on how far they would fall.
Gerli’s Reventure App expects a 9.1-percent drop in home values in Denver over the next 12 months if the ongoing trends of rising inventory and buyers shrinking off the market continue. Duffy, on the other hand, told Newsweek that prices won’t fall much, but she expects the market to continue “normalizing” in the coming months.
“Home prices won’t diminish in a way to make them more attainable, only [mortgage] rates have the power to do that,” she said. “Both sellers and buyers will have to enter the market with patience and reasonable expectations.”
