By Dr Denver H. Bubble
In spite of Russian hackers and haters (but I repeat myself), our forecasts continue to come true. The Denver residential market, which combines both single family and condos, saw sold homes decrease 29% in September month over month. Both average and median prices dropped as well. The average sold price was down 3.3% to $455,980 and the median price dropped 2% to $399,500. Both of these drops were the month over month decline.
Inventory continues to climb, up 7% month over month and 16% year over year to 8,807 homes. According to the Denver Metro Association of Realtors, the inventory increase was concentrated in Denver, Douglas, Arapahoe, and Jefferson counties. Average active listings since 1985 for September is 16,733 so we are still below average in terms of home supplied to the market. We have plenty of room to run for inventories to reach their historical norms.
In spite of interest rates, mortgage applications increased 2.8% last week. The average 30-year fixed mortgage increased to the highest level in 7 years to 4.97%. However, the rising interest rates environment continues to slow refis, which were down 35% year over year.
We continue to forecast higher housing inventory in October combined with higher interest rates on mortgages, which should lead to a further decrease in home prices. It will be interesting to watch how sellers react in October to the plunge in home sales from September. We think the decline in median prices will be in line with the 2% drop in September. We advise homebuyers to hold off on buying a home, as prices will continue to become more affordable as the Denver housing bubble deflates.