Kiss those years of double-digit annual home price gains goodbye. Depreciation has made a comeback in Boulder, Denver and Douglas counties, foreshadowing more widespread declines in the months ahead, according to a report Tuesday from the Colorado Association of Realtors.
The declines are not huge, at least for single-family homes, and the metro area as a whole still shows a modest gain. But the new year appears to have ushered in what some buyers have long waited for — lower home prices.
“We are seeing a ton more properties come on the market, but not an increase in the number of sales,” said Matthew Leprino, a Denver-area Realtor. He said it is the first time Denver County has seen a decline in its year-over-year home price numbers in several years.
“The median price for a Denver single-family home is now equal to that of March 2017 — $425,000,” he said.
A year ago, the median price of a home sold in metro Denver was $430,000. The decline of 1.2 percent is relatively tame compared with the 12.8 percent free-fall in condo and townhome prices, which went from $389,900 a year ago to $340,000 last month.
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“That one is a bit of a puzzle to me, why it has gone down so substantially. There is such a cooling right now in condos,” Leprino said.
In Boulder County, the median price of a single-family home sold dropped 2.7 percent — from $550,000 a year ago to $535,000 last month. For condos, it is down 8.7 percent, from $399,950 to $365,000.
“The writing is kind of on the wall. We should have had a more robust January than we did,” said Kelly Moye, a Realtor who specializes in the Boulder and Broomfield areas.
Douglas County, also on the higher end when it comes to home prices, went from gains to losses. The median price of a home sold in January went from $493,000 to $482,500, a decline of 2.1 percent. Condo prices are still holding up, barely. They rose 1.5 percent from $316,750 to $321,500.
Metro Denver home prices peaked in June of last year and have dipped lower month after month. Sellers are having a harder time hitting the market with the right initial price and listings are taking longer to sell. In Denver, the average time on the market has gone up from 31 days a year ago to 40 days in January, according to CAR’s numbers.
Redfin, the real estate brokerage, is reporting that 19 percent of its clients who were selling in metro Denver had competitive bids in January, down from 54 percent a year earlier.
When it comes to making year-over-year comparisons, this year’s softer market is now bumping up against what was a robust market in the first half of 2018. Unless sales find a way to really heat up this spring, future price declines are baked in.
The CAR report puts the median price of a single-home sold in metro Denver at $410,000 in January, up 2.5 percent year over year. But that median sold price will have to rise to $420,000 in February to avoid turning negative. By June, it will need to get to $439,675.
Relative affordability was the dividing line between the counties that saw home prices rise and those that saw them fall in January.
Adams County had a 5.1-percent annual increase in the median price of a home sold last month, going from $352,000 to $370,000. Condo prices also held up there, rising 5.5 percent to $270,000.
In Arapahoe County, with the second-lowest home prices after Adams, single-family prices rose 2.8 percent to $390,000, while condo prices were up 2.6 percent to $248,700. Jefferson County experienced a 1.2-percent gain in single-family home prices, to $437,500, while condos shot up 13.5 percent to $295,000.
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Broomfield County was an anomaly. New listings shot up 72.9 percent year-over-year. Despite that surge, the days on market didn’t budge at 43 and the median sales price rose 4.3 percent to $483,250 for single-family and 24.9 percent to $405,000 for condos.
Agents had hoped that more abundant listings and lower mortgage rates, which have moved from 5 percent late last year to 4.5 percent currently, would lure more buyers off of the sidelines. But now that prices are starting to fall, some buyers may wait for a better bargain or more choices down the road.
Moye said that is what she is facing now. She has gone in circles with a half-dozen buyers the past three weeks. The urgency of the past few years to act is fading.
“They keep asking questions. I am watching their hesitation to jump in,” Moye said. “If they feel like the market is slowing, they want to wait and see if it is going to get even slower.”
