By Andrew Dodson – Reporter, Denver Business Journal
Nov 28, 2018
Anxious homebuyers in metro Denver hoping for a little relief in the coming year may need to continue being patient, as home prices are expected to keep going up.
Realtor.com’s 2019 housing forecast, which published Wednesday, estimates home prices in Denver to grow 6.8 percent from 2018. The average home sale in October was $471,321, according to the Denver Metro Association of Realtors (DMAR).
The number of home sales in 2019 is expected to decrease 6.7 percent.
That drop is in part attributed to the rising prices of properties, but also increasing mortgage rates, which are expected to hit 5.5 percent by the end of 2019. That increase would raise the average mortgage payment by about 8 percent, which could put home ownership out of reach for younger millennial and first-time homebuyers.
While it’s still very much a seller’s market, those who have waited to take advantage of Denver’s hot market might face a bit more competition in 2019.
“With less demand in the market, there will be fewer bidding wars and multiple offers,” according to the Realtor.com report.
Of course, that’s dependent on Denver’s inventory in 2019. Halfway through 2018, the metro saw inventory shoot up, but Jill Schafer, chairwoman of DMAR’s Market Trends Committee, said she still has buyers who aren’t finding what they’re looking for in a specific price range, especially in the suburbs.
“Inventory that showed well and was priced well was gobbled up quickly,” she said. “Those who were hoping to put it on the market without doing anything and priced it high had to make price reductions.”
Nationally, it’s expected to remain a seller’s market for at least another 5 years, according to the Realtor.com report. Schafer said there would be occasional dips, but Denver’s strong, diversified economy should help the city’s housing market continue its hot streak.
“If something drastic happens… or even if one of our sectors crashes, we have enough other things that we shouldn’t be impacted like we were a decade ago,” she said.
Luxury homes continue to sell strongly in metro Denver. In October, the luxury market saw a 26.77 percent increase in sold homes month-over-month, with days on market only increasing by three days. Luxury homes in Central Denver priced between $1 million and $2 million should continue to sell well in 2019, Schafer said.
Of note, out of the 100 largest housing markets in the country, Grand Rapids, Michigan is forecasted to see the biggest jump in home prices for 2019 at 8.2 percent.