July Teases the Start of a New Real Estate Game for Second Half of 2022

With active listings and inventory rising across the sevencounty metro area and state, slowing sales and fewer new listings have kept the full swing of the real estate pendulum in check, according to the July 2022 Market Trends Housing Report from the Colorado Association of REALTORS®. The combination of factors, including rising interest rates, is giving potential buyers a few more options and opportunities but it remains a seller’s market as median pricing holds strong.

In the metro-Denver market, the inventory of active listings rose nearly 10% for single-family homes and more than 11% for condo/townhomes. Statewide, those numbers were up 8.7% for single-family and 9.4% for condo/townhomes. Those numbers helped push the months supply of inventory for single-family homes in metro Denver to 1.9 months – up 72% from a year prior – reaching a volume not seen in approximately two years. Statewide, that figure did hit the two-months supply mark and is up nearly 54% from July 2021.

Traditional seasonal slowdowns and uncertainty among sellers also helped drive down new listings approximately 15% between June and July across all product types statewide. In addition, the percentage of list price received also dipped approximately 2% across the board and ranges from 100.1% for single-family homes statewide to 100.9% for condo/ townhomes in the Denver metro market.

Despite rapid changes in several market measurements, median pricing held its own. In the Denver metro area, singlefamily homes dipped 1.7% from June to July to $635,000 but remain up more than 10% from a year prior. Condo/ townhomes fell nearly 7% from month-to-month, however they remain up 6.8% compared to a year ago. Statewide, median pricing for single-family homes fell 1.3% to $580,000, up 10.5% over July 2021. Condo/townhome median pricing slipped 5.1% to $411,395 which is up 7.3% over a year prior.

With diverse and local factors playing out across the state, REALTORS® across the metro area and state shared these highlights:

• Aurora – The best description for the Aurora/Centennial market is fickle. The good news for buyers is that the inventory is up about 30% over last July, giving buyers more choices and the opportunity to avoid bidding wars and some of the craziness that we saw earlier in the year. Average days on the market is also up over last year. For sellers, the good news is that prices are still up over last year. In Aurora, prices are up 12% to a median price of $555,000, and in Centennial prices are up 8% to a median of $680,000.

• Boulder/Broomfield counties – News of price reductions pepper our emails each morning and bidding wars seems to have gone away however, the market shift hasn’t impacted Boulder and Broomfield counties significantly. Buyers who qualify at higher rates enjoy a few more days to look at homes and less competition. This market correction is just what we needed to slow down a bit, but not enough to come anywhere close to a buyer’s market. Not yet.

• Colorado Springs – One weekend we’re watching buyers toss everything they can at a house. Four weeks later, sellers are shell shocked they may have missed the top of the market. July puts into perspective how much of a change we are seeing. We start with a 23% drop in sold properties, year over year. That number by itself would make one sit back in their chair and ponder. But the follow up to that is a 91% increase in active listings and the final blow is a 19% drop in pending listings. We are playing a totally different real estate game.

• Denver County – The rate at which prices are increasing, is decreasing - just 11.5% year over year vs. July 2021's 21.5%. With 1.3 months inventory supply, we tie that of pre-COVIDmadness levels. The median price for a freestanding home, though still record-setting, $723,750, is actually lower than last month’s $750,000. However, it’s important to note that before you read that last number and wonder if that means prices are decreasing, the answer is a resounding ‘no.’

• Douglas County – Slow can seem scary, especially when accompanied by headlines about recessions and bubbles, but I reiterate my remarks from last month: this is a step toward normalcy and it is NOT unhealthy. The shift we are seeing in the markets right now are likely driven by real estate’s natural seasonality, and actually represent a more healthy market. A year ago: inventory was more than 34% lower, homes spent almost half the time on the market, and were going for about 3.7% more over list price. It was extremely difficult to buy a home.

• Durango/La Plata County – The pendulum appears to be swinging slightly in the direction of a normal summer month. Given the craziness the real estate market has seen in the last two years due to COVID, 2019 is the most recent ‘normal’ year to use for comparison. Comparing July 2022 to July 2019, the number of single-family listings sold was just seven units short of 2019. Inventory, or the lack of, continues to buoy prices.

• Estes Park/Larimer County – We’re showing some relief from the feverish market experienced the past year, specifically in terms of more time that listings are on the market and the percent-of-list price received. New listings aren’t popping up to meet the demand and the ones currently on the market are selling. Seeing some price reductions as well indicates that listing prices were inflated and coming back to reality, or closer to it.

• Fort Collins/Northern Larimer County – The housing market of the 2020s has been defined by high demand, low inventory, and until recently, cheap money conditioning buyers to be constantly vigilant for the “Goldilocks Home, ”the home that’s ‘just right’. The crest of this phenomenon hit in April 2022 as list-price to sale-price ratios climbed to nearly 6% over-asking. Then buyers were slapped with big jumps in fixed rates for 30-year mortgages in May, June, and July that made buying houses at the current median price of over $600,000 exceedingly impractical. While these market results show some softening – this is not a bubble bursting by any stretch.

• Grand Junction/Mesa County – Median and average sales prices are off from last month, but only slightly. Compared to July 2021, median is up 16.2% at $395,000, and average sold is up 16.4% to $435,907. The market factors are giving buyers a little more selection, but it remains a seller’s market. Interest rates leveled out a little last week, and it will bear watching what effect it has on activity.

• Jefferson County/Golden – The housing market story remains the same for the month of July in Jefferson County. Although it is still a seller's market, prices are getting reduced if the home is not priced right when it hits the market. For single-family homes, the median sales price increased 8.6% to $695,000. New listings were up 13% with overall inventory up 41.7% and average days on market up 50%.

• Pagosa Springs/South Fork – We’re seeing shifts in inventory and mindset. July appears to be the awakening month in Pagosa Springs and South Fork, Colo. Both day temperatures and home sale price points rose to the heat of summer. Although like summer nights that cool down, so are exaggerated home prices that are now showing price adjustments daily.

• Pueblo – Similar to our June analysis, the July market numbers trended downward with the exception being median sales price that rose 4.7% to $321,000 and is up 14.5% year to date. Compared to July 2021, new listings were off 0.8% and overall sales fell 18.2%. The percent of list price received also dipped 1.7% to 99.7% compared to last July. All of these factors helped push the months supply of inventory up nearly half a month to 1.9 months and is providing a little bit of relief and help to potential buyers.

• Summit, Park & Lake counties – The market is leveling, and chances are better than ever to get a property in Summit, Park or Lake counties. You might even get to brush off your negotiating muscles. While economic factors and interest rate hikes might make some back off, it makes a great opportunity for others. There is now about 4 months of inventory. A balanced market is about 6 months, so these changes feel like we are heading to equilibrium.

• Telluride – With sellers adjusting their prices somewhat and buyers still feeling good about the safety of their real estate investments, I believe 2022 will continue to have very good sales. The higher-end markets do price out some buyers, but now they might be letting some of those buyers back in as August sales are off to a very good start.

• Vail – July brought the market trend to a new position. The transactional volume has been declining for a number of months and year-to-date has dived to down to -27.3%. A few months ago, we saw a negative dollar volume versus the same month in 2021. In July, the year-to-date dollars were -6.2%. The July performance versus 2021 was -27.3%, transactions were negative 25.5% in dollars. Based upon this performance, it appears the volatility of the past two years may have reached a level where the market trend is more normal, as well as the trend moving forward.