By Dr Denver H. Bubble
Hopeful everyone had a nice break for Labor Day to start the month September, we did, and now we are back to work with a new blog post. The red hot July housing market in the metro Denver region has cooled in August. Month over month median and average prices were down. In the Denver Metro area, median prices fell 1.16% and were down 1.30% for average residential prices. Single-family homes sold price were at $537,024, up 3.53% from August 2018.
Housing inventory is down 0.1% to 9,350 from July to August. However, if we look at the year over year inventory statistics, inventory is up a healthy 13.64%, still in the double digits, but lower than the increase we have seen all year. The 9,350 homes available were still far below the historical norm of 16,761, showing the marketing inventory is still tight relative to Denver's history.
Sold homes were down almost 7.9% year over year, and down 10.9% month over month, which was expected as sales tend to drop off as the new school year approaches. However, the amount of the decrease is higher than what we expected which could be an early sign of trouble in the housing market for the metro Denver area.
Homes are sitting for longer with the average home on the market for 30 days up 30.43% year over year, 15.38% from June. Another warning sign of a cooling market.
We are still holding to our forecast for the best case for sellers in the metro Denver area for average prices to increase for single-family sold homes between 1% and 2% year over year in 2020. This increase would put single families between $542,000 to $548,000 next year in August 2020. We saw the +4% increase in July to be the high point of the year over year increases, and that was confirmed with sub 4% year over year increase in August.
Home prices should continue to rise in the short term, although at a very slow pace, 1% at the top, the possibility of monthly declines are high. Despite of the downside risks in the global economy from the recent slowdowns in Germany and China, the US GDP continues to demonstrate growth, although not at the rates we saw last year. The key market to focus on for the future of the mortgage rates will be the jobless rates. The US unemployment rate came in at 3.7% in August 2019. We seem to be at the maximum lowest rates sustainable in the US and if this rate to increase it should cause home prices in the metro Denver area to fall in 2020. Mortgage rates will move inverse to the unemployment, and it will be interesting to see how these two move in relations to home prices in the metro Denver area.
We have also been working on existence redesign of the website here at Dr. Denver Housing Bubble. With the new launch we will also have a new URL which were will share with you in the future.