Cooler days brought with it conditions of a cooler market too in the Denver-area. Is this shift in the market seasonal or something more? In fact, it’s a little bit of both.
Seasonally, we expect to see home prices and sales to drop this time of year. They have been down month over month for the last three months, but, again, this is normal. The outlier, however, is the significant 33 percent month-over-month decrease in sales of homes priced over $500,000. For comparison, metro Denver experienced a 17 percent drop during this same time period last year.
Looking at the housing market from a macro level, what is happening is that we are heading towards balance. Balance is where conditions favor the home-buyer and seller equally, which is not something we have experienced for some years now.
Market Adjustments Affecting Home Prices
In the single-family home market, the average sold price decreased 3.79 percent month over month to $502,034, while the median price decreased 2.73 percent to $428,000. The year-to-date average sold price stands at $523,224 for the single-family home market, up 9.16 percent from last year, with the median sold price at $445,000, up 8.54 percent. Condos continue to outperform single-family home prices with the average sold price of $350,766, representing an 11.38 percent increase over 2017. The median price of condos sold also increased by 12.34 percent to $299,900.
Seasonal Slowdown in the Luxury Market
As far as the luxury market goes, homes priced $1 million and greater, it was a record-breaking summer. While sales of residential homes priced over $1 million plummeted 44 percent from August to September, it is important to look at the whole picture. Year to date, 29 percent more homes priced $1 million and greater have sold this year compared to last year. Furthermore, year-to-date sales volume in this luxury segment is nearing $2.5 billion, a whopping 27 percent increase over last year.
Taking a deeper look at the numbers, in September, 115 homes sold and closed for $1 million or greater – down 44 percent from the previous month and down 4.17 percent year over year. The closed dollar volume in September in the luxury segment was approximately $173 million, down 45.02 percent from the previous month, and down 6.9 percent year over year. Notably, year-to-date sales volume in this segment is outperforming years past. Furthermore, year to date, September had the lowest median and average days on market on record.
Our ‘hot’ market is still thriving, yet it is going through a shift that is to be expected due to both seasonal adjustments and its move toward balance.