Prices up, inventory down — housing trends in 2017 were not a significant departure from previous years.
Frustration and anger over lack of affordable options continued, as home values in the market have increased at historically high rates for the last three years, says Steve Danyliw, chairman of the Denver Metro Association of Realtors’ (DMAR) Market Trends Committee.
Last year saw record low housing inventories for many months — most notably December, with fewer than 4,000 active listings at the end of the month, according to the January DMAR market trends report.
Should Denver expect a quick turnaround in 2018? Don’t hold your breath, experts say.
“Any correction will come over a long period of time. We need more housing creation, specifically in the lower end,” Danyliw said.
Last month, Denver County had 40 percent fewer available homes than a year earlier. And 2016 was already “paralyzing,” said Matthew Leprino, DMAR central district director at-large and owner of Leprino Home Inc.
Matthew Leprino, DMAR central district director at-large and owner of Leprino Home Inc.
“What we might start seeing is a slowdown,” he said. “Homeowners are going to be less inclined to sell their homes, because they don’t have options for purchasing.”
Leprino said he has started to see more people “duck the trend” of selling homes, and opt for renting. If they don’t have great options for relocation, they’ll stay put until inventory improves.
With historically low inventories in 2017 also came worrying home price hikes — and both did little to extinguish the metro’s affordable housing issue.
“For the last three years, home values in our market have increased at historically high rates,” Danyliw said. “Wages haven’t kept pace, making it more difficult for people to afford a home.”
More options might hit the market in 2018, but a plethora of affordable inventory won’t appear instantly, he said. Correction will take some time.
However, it isn’t all bad. Prices continue to increase year over year, but at a slower rate than previous years, according to DMAR, the Colorado Association of Realtors and the S&P/Case-Shiller Home Prices index.
According to Leprino, the second half of 2017 showed that while prices continued to increase on average, the rate at which they were increasing mellowed.
“The prices are going up, inventory is getting tighter — we know how supply and demand works,” he said. “Prices should still be skyrocketing, but they’re not.”
In Denver alone, the median price dropped 4 percent between November and December. While a drop during the end of the year is typical, Leprino says, it’s unusual for it to be that much.
Danyliw also said he believes 2018 will see continued price growth, but at a slower rate compared to previous years.
“Generally, I’m optimistic,” he said of 2018. “One area of concern is low inventory. This issue will continue weigh heavily on this market with no easy solution in sight. ”
Here are a few highlights from the 2017 metro-Denver housing market, according to DMAR:
57,788 homes closed, which broke 2016’s record by 2.39 percent. The average sold price of a home was $434,097, a record high. The median sold price of a home was $378,500, also a record high. 2017 saw a record low in housing inventory, with just 3,854 active listings in December. Closing volume hit a record high at $25 billion.
2017 Largest Residential Real Estate Firms
Ranked by Sales volume in Denver area in 2016
Rank Business name Sales volume in Denver area in 2016 1 Re/Max Alliance $3.45 billion 2 LIV Sotheby’s International Realty $2.42 billion 3 Re/Max Professionals $2.37 billion View This List
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“Homeowners are going to be less inclined to sell their homes, because they don’t have options for purchasing.”