Housing markets across the state slowed sharply in August, but some held up better than others in the face of rising interest rates and reduced buyer demand, according to an analysis of numbers provided by the Colorado Association of Realtors.
The Denver Post examined single-family home sales in August in Colorado’s 12 most-populated counties, which include the six core metro Denver counties — Adams, Arapahoe, Broomfield, Denver, Douglas and Jefferson — as well as the counties covering the state’s other metro areas — El Paso, Larimer, Weld, Boulder, Mesa and Pueblo.
The biggest decline in the number of single-family homes sold in August 2022 versus August 2021 occurred in Denver County, down 32.2%, followed by Weld County, down 31%, and El Paso County, down 30.2%. The smallest sales declines were in Pueblo County, down 16.3%, and Mesa County, down 18%.
The inventory of homes available for sale rose sharply year-over-year in most counties and more than doubled in two counties — El Paso, up 117.6%, and Broomfield, up 112.1%.
“What a difference a few months make. The shift is here, and it is moving fast,” said Colorado Springs-area Realtor Patrick Muldoon in comments included with the report. “Buyers have most of the power now, but are either patient or not interested. After all, why would they be? Every day is a news cycle of bad economic news ranging from stocks, inflation, layoffs and housing data.”
Denver County was an anomaly. It had the smallest increase in single-family listings available at the end of August, up 19.4%, and recorded a 22% decline in the inventory of townhomes and condos available, opposite of the trend elsewhere. Yet, the median price gain for single-family homes sold, up 4.5% year-over-year, was the most tepid of any market other than Pueblo, where prices rose 3.7%. Townhome and condo prices were up only 1.9% in Denver year-over-year.
“The sky isn’t falling, there isn’t some explosive market change as the market itself is always in motion, always in a state of flux and is about as reliable as a 1973 Ford Pinto. The only thing that is reliable is change and the fact that, year-over-year, market-over-market, values always increase with the wisdom of a historic perspective,” said Denver-area Realtor Matt Leprino, offering a different take in the report than Muldoon did.
Interest rates are moving higher as the Federal Reserve seeks to combat inflation and that has many buyers holding off. The average rate for a 30-year mortgage topped 6% this week, double the rate of a year ago and the highest seen in the U.S. since 2008, according to the Mortgage Bankers Association.
Yet, new listings are also down, which works against an inventory glut that could send prices spiraling lower. Jeffco had the biggest drop in new listings, 28%, followed by Larimer County at 18.2%. Sellers listed at close to the same pace last year in Broomfield and Adams counties, while Weld County saw an 8% increase in new listings.
In every county studied, the premiums sellers once commanded above the list price this spring are gone. Sellers in Weld County came closest to getting the full list price at 99.8%, followed by El Paso County at 99.7%. Sellers are discounting the most in Pueblo County, with sales prices at 98.4% of the list price on average and in Mesa County at 98.5% of the list price.
Listings in those two counties are also spending the most time on the market — 61 days on average in Mesa County and 49 days in Pueblo County, although that Pueblo average is down from 62 days a year earlier. Boulder, Larimer and Weld are the other counties where listings are taking a month or more to go under contract on average.
Homes are being claimed the fastest in El Paso County, at 17 days on market. Denver, Jefferson and Broomfield county listings are going under contract in 18 days on average.