I was looking at some home price stats from the past few months and it seems like the much talked-about slow-down in the Denver market is upon us.
Big picture? The past three months have seen flat year-over-year (YOY) growth in sold prices, according to the Denver Metro Realtors Association. And compare those numbers to the crazy YOY growth from the same months in 2018:
- March 2018: 12.5%
- April 2018: 10.9%
- May 2018: 11.4%
- March 2019: 0.6%
- April 2019: 1.8%
- May 2019: 1.5%
We were seeing slower YOY growth over the winter, but not in this range. My thoughts:
- Sellers need to price correctly the first time
- We're seeing more price drops and days on market. You price too high and your place stays on market too long, you get a stigma and may end up having to drop lower than if you had priced it right in the first place
- Buyer can get more concessions in price and inspection.
- We love this because we do a lot of work with buyer looking for their home or a house-hacking/Airbnb like property.
- No need to freak out. (This is my editorializing.)
- We've been waiting for this slowdown for awhile. We haven't seen anything that says there's an '07/'08 on the horizon. It's more like a correction.
- Real estate is a long-term play. (You don't wait to buy real estate. You buy real estate and wait).
That said, I'm sure this is of interest to others. What does everyone else think?
I agree that the slowdown is upon us, and also agree that's it's simply a correction, not a crash by any means. Sellers are coming on the market way too hot; roughly 30% of homes sold this year have had to decrease their listing prices before they were sold. I think we'll continue to have an incredibly hot market for at least 2-3 years to come, but sellers shouldn't be getting too greedy, nor investors and developers.
We are just moving towards a balanced market, which those who haven't been in the business 10+ years have never seen. We would be moving faster towards it if rates had continued to go up. We are still under 2 months of housing supply. A balanced market has ~6 months supply and 15k+ listings. I think we are around 7k right now.
I'm still seeing multiple offers on HOT/turnkey properties in good areas. Over ask offers are still happening, but not as much.
Denver just has an issue with affordable housing. Not really but the politicians and activists keep saying that. I don't see any downturn yet. But investors should start stress testing their properties and income streams and prepare. Look into passive income opportunities!
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