As the summer housing market starts to draw to a close and the expected seasonal slowdown starts to take root, prospective home buyers might find they have a few more choices before signing on the dotted line.
At the end of July, there were 7,643 single-family homes, townhomes, and condominiums on the market. That’s almost a 4% increase in the active inventory from a year earlier. The last time there were more homes on the market in a July was in 2015. The increase in inventory comes at a time when mortgage rates and home prices continue to rise. Although, prices on an annual basis are increasing at a slower pace than in the past few years. The average 30-year, fixed-rate mortgage rate is now hovering at about 4.5%. Which is still low by historic standards, but about a half of a percent higher than a year ago.
Meanwhile the average price of a single-family home sold last month was $529,124. Down 1.48% from July, but up 7.18% from July 2017. Buyer put 5,764 homes under contract last month, largely unchanged from June, but up 5.24% from a year earlier. Some 5,043 homes sold last month, a 15.65% plunge from July and an 8.54% drop from a year earlier. While the month-to-month may seem severe, it is not an unusual seasonal drop. In fact, in July 2017, home sales fell by almost 20% from June. The sales drop is likely largely due to the double whammy of rising mortgage rates and rising home prices.
On a month-to-month basis, even the luxury home market cooled in August. There were 206 sales of single-family homes and condos priced at $1 million or more in July, a 16.26% decline from June. Still, luxury home sales were up 17.71% from July 2017. The year-over-year increase of luxury homes in July, while the strongest of any price strata, was still substantially below the year-to-date 29.14% sales increase when you dig into seven months of DMAR data. Through July, buyers purchased 1,204 properties, compared with 1,002 in the first seven months of 2017. The total luxury sales volume this year is $1.95 billion, a 28.72% increase from the same period last year. And keep in mind that seasonal drops, are part of the natural cycle.
Despite slower sales and a rising inventory, the single-family home market ended with a 1.59-months of inventory, which is the equivalent of about 4.3 weeks. Meaning if no new supply was added to the market and the sales stayed the same, all the homes would be gone in a little over a month. Perhaps one of the strongest metrics that the sky is not falling is that the months-of-inventory, or MOI, was slightly lower in July than it was year earlier, according to DMAR. Such a low supply is a sign that Denver, overall, remains a strong seller’s market. And there are no signs that the end is near of the Denver bull market for housing.