While a rabid market can be a fun ride, it is not a healthy or sustainable state. Denver has enjoyed a rabid market through the first half of the year. Now, the market is stabilizing and moving back in to a healthy category.
According to recent data from MLS, average home prices in August tapered slightly, which is typical for this time of year, but a change from the continual month-to-month increases we had been seeing . Year-over-year pricing is up 9%.
The uptick in interest rates in July was a big factor, but so also was the increase in inventory. Inventory increased for the third month in a row – but even with the increases, there is just a 7 week supply of homes. Luxury home sales have been robust and have helped to keep the market averages elevated.
Expect pricing to continue to stabilize as we head into the fall – both due to typical seasonality as well as increasing interest rates. The true picture on pricing may be somewhat clouded by luxury home sales, which continue to be robust. These may keep overall averages up, while lower price tiers, which are more affected by rate increases, begin to trend downward (which is a typical seasonal pattern).