After predicting these for a year since we have started blogging we are seeing the bubble finally burst before our eyes. Matthew Leprino, a Denver-area Realtor reported, “The median price for a Denver single-family home is now equal to that of March 2017 — $425,000.” In June 2018, we hit the high in terms of median sales prices, which was $451,500. From June 2018 to January 2019 that is an almost 6% decline! Also, days on the market has increased for single families from 19 days in June to 43 in January 2019. That is a 126% increase!
According to this article in the Denver Post, “Agents had hoped that more abundant listings and lower mortgage rates, which have moved from 5 percent late last year to 4.5 percent currently, would lure more buyers off of the sidelines. But now that prices are starting to fall, some buyers may wait for a better bargain or more choices down the road.”
The big question is no longer that the bubble has burst but whether the decline will be rapid or a more gradual price dropping. We will continue to see and report on if housing inventory increases which will be the main driver of future declines. If people decide the party is over and want to lock in the price gains they will list their homes in masses in volumes we have not seen since the Great Financial Crisis of 2008. We are forecasting a return to the normal levels of housing inventory which will drive a final nail through the coffin of the Denver housing bubble.