Home sales in the seven-county metro Denver area dropped more than 16 percent in November compared to the same month a year ago, but the median home price jumped 5.7 percent over November 2017, according to the latest report from the South Metro Denver REALTOR Association’s (SMDRA) Statistics Committee. Year to date, the metro Denver region has experienced a (nearly) 7 percent housing appreciation, which is historically between three to 4 percent, so the housing market in terms of prices is still accelerating at a pretty fast pace, according to the SMDRA report for November 2018.
The SMDRA report states that the drop in sales in November was due primarily to the “hot” market earlier last year than in more recent years. Year to date, and reviewing statistics for the past five years, home sales in the south metro Denver market have remained remarkably flat. Residential builders have started to close the gap on the inventory problem, but available housing still remains at historically low numbers, according to SMDRA.
The SMDRA Statistics Committee, which is comprised of some of the most experienced, knowledgeable real estate professionals in Colorado, takes a broad historical look at statistics rather than focusing on a single month. Home sales remain steady, and the low inventory figures continue to push prices higher.
“With this knowledge, why does it still feel to many that the market is shifting and prices are dropping,” asks Marcel Savoie, chairman of the SMDRA board of directors. “We call this a declining rate of appreciation. For the past several years, home prices were appreciating at a nearly 10 percent rate, which has now slowed to 7 percent. As sellers continue to price their homes around the 10 percent number, they end up sitting on the market longer and having to drop their price in accordance to the current 7 percent reality. So, while the rate of appreciation is less, we are still nearly double the historic appreciation rate. It’s this slowing and leveling of home prices, combined with sellers not grasping the current reality, that is creating the illusion of a slowing market.”
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