Leaves are holding tight to the trees this autumn along the Front Range, but home prices have started tumbling despite more-favorable mortgage rates for buyers, according to a monthly update from the Denver Metro Association of Realtors.
The median price of a single-family or “detached” home sold in metro Denver last month was $630,000, down 3.11% from August and 1.56% from September 2023. For townhomes and condos, the median price was $403,500, up 2% from August but down 3.93% from a year earlier.
Looking at single-family-home prices on a year-to-date basis, the median sales price of $650,000 matches the year-to-date figure for 2022. For condos, the year-to-date median price is down 1.21% compared with those in 2023 and 2.3% those from 2022.
“Homes are simply spending more time on the market and experiencing more price reductions before finding a buyer,” said Libby Levinson-Katz, chairwoman of the DMAR Market Trends Committee in comments accompanying the Market Trends Report.
Levinson-Katz attributed the hesitancy to the lingering effects of higher rates during the summer and concerns surrounding the upcoming presidential election next month.
“Many buyers who I am working with are simply waiting for truly the perfect fit, before submitting an offer,” she said. “I do expect the months of inventory to continue to climb as we move closer to the election and the upcoming holiday season.”
Normally, home prices soften when faced with sharply higher mortgage rates, which make properties less affordable and can reduce demand. But since the pandemic, home prices in metro Denver and elsewhere found a way to keep rising much faster than incomes.
This time a year ago, 30-year mortgage rates averaged 7.5%, and last week they averaged just less than 6.1%, according to Freddie Mac. Despite 30-year rates reaching their lowest level in two years, buyers are not rushing in to take advantage as many in the industry forecast.
Home and condo sales fell 19.2% from August to September, to 3,092, and are off 9.1% from a year ago. Listings also are taking longer to go under contract, with a midpoint of 25 days in September vs. 21 days in August and 14 days a year ago.
A sluggish sales pace contributed to buyers having more options last month with 11,115 active listings — up 3.65% from August and 45.7% from a year earlier.
Since 1985, the number of listings for September has averaged 15,253. The tightest month on record was September 2021, when only 3,971 listings were available, according to DMAR.
Timing might be at play, in that buyers may not have had enough time to respond to the sharp drop in borrowing costs that came after the Federal Reserve cut a key interest rate Sept. 18.
One measure of future activity, known as pending sales, ticked up 3.6% on the month in metro Denver and is up 25.4% compared with September 2023.
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