Homebuyers in metro Denver will need to put aside visions of a more bountiful banquet of properties for sale in the new year. Owners are staying home, literally, and that should keep them in control of the market going into 2020.
The inventory of homes and condos available for sale in metro Denver plunged 27.9% from November to December, a record monthly decline, according to the December Market Trends Report from the Denver Metro Association of Realtors.
“The main reason we saw fewer choices was not because more (homes) were going under contract or selling, but because nearly 30% fewer new listings came on the market in December compared to the month prior,” said Jill Schafer, chairwoman of the DMAR Market Trends Committee in a release accompanying the December report.
Normally, the housing market takes a breather for the holidays. The typical drop in the inventory of homes and condos for sale from November to December is 11.7%. So the 27.9% drop was off the charts, and it came despite a 1.7% drop in monthly sales.
Metro Denver ended the year with 5,037 active listings, down 9.7% from December 2018 and only 41% of the 30-year average of 12,941 active listings at the end of December.
After reaching a historic low of 3,854 listings in December 2017, the inventory of available properties for sale in metro Denver spiked 44.7% in late 2018 to 5,577, which came after a sharp rise in mortgage rates made it harder for buyers to afford homes.
The Federal Reserve cut short-term rates last year, and mortgage rates moved lower, reviving the market. Sales of homes and condos rose 10.7% in 2019, compared with 2018.
Buyers came back out, but sellers pulled back significantly as the year came to a close. Sellers put up 5,425 homes and condos for sale in October, offered 3,651 new listings in November and cut that further to 2,558 in December.
Schafer notes that it would take only 1.13 months to sell all single-family homes available at the end of December and 1.37 months to sell all condos in the Denver area. For buyers to have a market in their favor, that time would need to get closer to four months, she said.
It is unclear if sellers aren’t as motivated, say because fewer of them are planning to leave metro Denver or to upgrade or to give up the super-low mortgage rate they have. Some could be waiting for a more opportune time to sell, which could contribute to a flood of listings this spring.
Metro Denver home prices rose to new highs in 2019, although the percentage gains were more muted than those of prior years. The median price of a single-family home sold in December was $450,000, up 4.65% from December 2018. The median price of a condo sold last month was $308,788, up 3.6% from December 2018.
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