Nearly a quarter fewer homes and condos sold in October than in September as higher mortgage rates sidelined more buyers. But sellers also went on strike, putting only three-quarters as many homes on the market as they did in September, according to a monthly update Thursday from the Denver Metro Association of Realtors.
That tug of war between reduced demand and lower supply caused the inventory of active listings, which had been rising sharply this summer, to reverse course. There were 7,290 homes and condos listed for sale at the end of October, down 5.1% from the number listed at the end of September.
Over the past 12 months, the number of listings is up 116%, which seems like a huge increase, but it comes off very low levels. Even after more than doubling the past year, the number of listings is still under half of the historical average for October of 14,597 in tallies going back to 1985. And the supply hasn’t reached pre-pandemic levels of the 8,557 listings available in October 2019.
“While our market changes, the point that has been largely overlooked is that the last two years have been the exception and certainly not the rule. If we were to remove 2020 and 2021 from the record books, our market trajectory is on pace with where it should be had COVID-19 not happened,” said Libby-Levinson-Katz, chairwoman of the DMAR Market Trends Committee and a Denver Realtor.
Home prices were the most noticeable things to go whacky since the summer of 2020. But they are falling back to earth fast. The median price for a single-family home fell 1.2 percent between September and October to $622,490. For the year it is still up 6.5%. The median closing price of condos and townhomes fell 1.22% to $405,000 on the month and remains up 8% on the year.
The number of days that listings spend on the market before going under contract also continues to rise. The average for single-family homes is now 29 days, while for condos and townhomes it is 25 days. It took three times as long to find a buyer for a listing in October than it did in May.
Levinson-Katz said sellers may be waiting to list during the peak home-buying season this spring. But she cautioned that some buyers are still active and trying to lock in something before mortgage rates move even higher. For buyer and seller alike, conditions are likely to be more favorable now than six months from now.
