Fuzzy sweaters, hot apple cider, and pumpkin everything: all signs that summer is over and autumn has arrived. Another indication? Sluggish September activity in the housing market. This time of year typically coincides with decreasing temperatures and home sales, and this September was no exception with nearly 22% fewer residential home sales than in August 2017. We could chalk this up to the expected seasonal downtick, but taking into consideration a four-month run of drooping transactions and a year-over-year decline approaching 16%, this may be a sign of the tides beginning to turn.
Though we’re seeing slight drops in average and median residential prices over last month, sellers are still cashing in at around 8% more than in September 2016. Higher price tags may partially explain the slowdown in the number of homes sold. However, with only 1.8 and 1.5 months of inventory for single family and condos respectively, we’re still in the midst of a seller’s market. In order to cross over into a buyer’s market, a significant increase in active inventory would be needed, and although condo listings are up by almost 20% over August 2016, overall residential inventory hasn’t budged year-over-year.
According to their website, Eagle Home Mortgage is attempting to combat the affordability issue for young buyers by offering to pay up to 3% of the cost of a new home toward student loan debt. If this tactic is successful and other lenders follow suit with similar offers, demand will continue to rise while inventory remains low, thus consistently pushing up prices. Otherwise, unless salary growth starts catching up with housing costs (keep those tech companies moving in!), we’ll continue to see a decrease in home sales which will eventually lead to lower asking prices.
If you’re looking to buy but are worried about not being able to afford a home in the Denver area, give us a call at 720-935-0412 or fill out our contact form. We’ll be happy to work through your options with you!
Note: All data, unless otherwise stated, has been sourced from the October Denver Metro Real Estate Market Trends Report compiled by the Denver Metro Association of Realtors and includes 11 counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park.