Record home price pace takes a breather, REcolorado.com reports.
Home prices last month still highest ever for a July.
Prices often peak in June.
For the first time ever in a July, the average price of a home sold in the Denver area has topped $400,000.
But the $408,406 average price of a home sold last month was down almost $10,000, or 2.46 percent, from the all-time record so far, of $418,747 in June, according to a report released on Thursday by REcolorado.com, a home search site for Colorado home buyers, sellers and renters.
It is not unusual for home prices to peak in June.
Since 2012, home prices have reached their zenith in June, with the exception of 2014, according to REcolorado data. But that year, the average sold price in July was only $31 higher than in June.
REcolorado, the largest Multiple Listing Service in the state, is the parent of REcolorado.com.
Except for a month-over month gain of a mere 0.04 percent in 2014, home prices have fallen from 1.9 percent to 2.9 percent in July from June, every year since 2012, according to an analysis of Metrolist data by Denver Real Estate Watch.
Still, the dip in home prices is a welcome relief for prospective buyers. Home prices had set a record each month from December through June. In other words, that was 7-consecutive months of record prices. The record prices has led to frequent bidding wars, with many homes selling for above the asking price. Competition is especially fierce for homes listed for less than $425,000.
The last time home prices fell on a month-to-month basis was in September 2015, when they came down 2.87 percent from August.
A major driving force of the record, or near record home prices, has been the dearth of homes on the market.
From that perspective, the good news is that home buyers in the Denver area had 10.3 percent more homes to choose from in July than in June, REcolorado.com, reported.
There were 8,859 active listings on the market in July, compared with 8,030 in June.
Active listings dipped 1.2 percent from 8,967 in July 2015.
Historically, there are typically twice as many homes available during the summer in the Denver area than there are today. Many homeowners have been reluctant to put their home on the market because they have so few choices, creating a Catch-22 situation.
Some 7,483 new listings came on the market last month, a 7.3 percent drop from 8,072 new listings in July 2015. New listings in July fell 9.3 from 8,248 in June.
“As we draw close to the end of the traditional summer selling season, we anticipate the market to remain strong but stable, as increasing inventory continues to provide buyers with more and varied opportunities,” said Kirby Slunaker, president and CEO of REcolorado.
“As the larger Colorado economy continues to strengthen, we expect the housing market to remain strong,” Slunaker continued.
He said REcolorado members tend to describe the overall market as “stable and sustainable.”
Meanwhile, 7,154 homes were placed under contract last month, a 5.5 percent increase from 6,779 in July 2015.
However, sales activity showed its typical seasonal slowdown.
The number of contracts written last month dropped by 4.8 percent from 7,513 in June.
There were 5,661 closings last month, a 5.8 percent drop from the 6,007 sales in July 2015.
However, closing were down only 1.4 percent from 5,742 in June.
Homes were selling much faster than a year ago, however.
The average days on the market in July fell to 19, 29,6 percent drop from 27 in July 2015. Average days on the market fell by 5.3 percent from 20 days in June.
At the end of July, there was about a 7-week supply of unsold homes on the market, compared with a 6-week supply in June.
A market in balance between buyers and sellers typically has a 4- to 6-month supply of unsold homes.
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.