The Final Stretch Of The Summer Selling Season
In August, the Denver Metro housing market experienced a continuation of recent trends. After reaching its peak in June, home prices in the area saw a second consecutive month of decline. The median closed price for a Denver Metro home in August stood at $582,700, representing a 1% decrease from the previous month, but still maintaining a 1% increase compared to August of the previous year. Despite this leveling off of prices, prospective buyers continue to face challenges related to affordability, primarily driven by persistently high interest rates.
The number of home closings in the metro area saw a slight increase from July to August, but it was notably down by 12% when compared to the same period the previous year. This drop in year-to-year closings was observed across all price ranges except for homes priced at $2 million and above, which experienced a remarkable 31% increase in closings compared to the previous August.
Inventory levels in August remained low, with a minor month-to-month increase in new listings entering the market. However, compared to the same time last year, there was a 7% decrease in the number of new listings. The number of listings pending sale, which provides insight into future closing activity, increased by 1% from July to August but remained 14% lower than the previous year.
The median closed price of homes continued to stabilize after the peak in June, with little room for price negotiation as homes closed at 98% of their asking price in August. While there was a seasonal uptick in home closings from July to August, the 12% year-over-year decrease in closings can be attributed to the combination of robust home prices and elevated interest rates, which are making it challenging for buyers to enter the market. Notably, the luxury market segment, defined by homes priced at $2 million or more, experienced a 31% increase in closings year over year.
Despite a slight increase in new listings from the previous month, overall inventory levels remained low across the Denver Metro area, with a 7% decrease compared to the previous year. Homeowners appear reluctant to give up their low mortgage rates for new homes, and the $500,000 to $600,000 price range saw the most new listings in August.
In the realm of rentals, 341 properties were leased using REcolorado MLS in August, marking a 17% increase compared to the previous August. More than half of these listings were single-family homes, leading to a decrease in price per square foot and price per bedroom compared to the previous year, while the median leased price increased by 5%.
To summarize, the Denver Metro housing market in August witnessed a stabilization of home prices following a peak in June, although affordability challenges persist due to high interest rates. Home closings declined year over year, except in the luxury segment, which saw significant growth. Inventory levels remained low, and the rental market experienced increased activity. Overall, the market continues to exhibit both strengths and challenges in the face of evolving economic conditions.