After hitting severe turbulence and taking a dive in September, metro Denver's housing market stabilized at a lower altitude in October, according to a monthly update from the Denver Metro Association of Realtors.
Buyers purchased 4,181 single-family homes and condos sold last month, a decline of 3.89% from the number of sales in September and 15.9% below the number of sales a year earlier.
That monthly decline was more in line with usual fall slowing than the alarming 30.5% drop in home sales measured between August and September.
The pendulum of market power can shift quickly after long stretches of favoring either buyers or sellers. That was the case in 2008 when the financial crisis put buyers firmly in the driver's seat and again in 2013, when the oversupply of homes evaporated and sellers took over.
Jill Schafer, the new chairwoman of DMAR's Market Trends Committee, said in the report that sellers are still in the driver's seat in metro Denver.
"It appears we still have a ways to go before we get to a buyer's market. And that's not just my opinion, that's the story the statistics tell as well," Schafer said.
Sellers had 8,539 listings on the market at the end of October, down 3.04% from September and up 35.28% from a year earlier. The inventory of homes for sale dipped below 4,000 late last year and has more than doubled since. Historically the inventory for metro Denver has averaged around 16,000 homes, so the market remains tight.
But home price gains are slowing in metro Denver and median prices remain below the peaks hit last spring.
The median price of a single-family home sold in October was $435,000, up 1.17% from September and 5.45% from October 2017. The average price rose 4.9% from September to $526,092, and is up 8.43% over the year.
The median price for a condo sold was $299,250, down 1.24% from September, and up 8.84% from October 2017. The average price of a condo sold came in at $341,418, a decline of 2.3% monthly and a gain of 3.49% year-over-year.
Agents report more sellers are dropping their asking price, more buyers are backing out of contracts and listings are taking longer to sell. New listings took 29 days to sell last month, up from a fast 19 days measured in June.
Higher interest rates this year have boosted borrowing costs and made mortgage payments less affordable than they were last year. And while home price gains are slowing, they haven't declined in response to a higher cost of money.
"Interest rates are starting to affect affordability," said Nicole Rueth, a lender with Fairview Mortgage and member of the markets trend committee.
Buyers face the dilemma of buying now to get ahead of future increases in mortgage rates or waiting for home prices to soften and more inventory to hit the market. Reuth said that indecision is contributing to a "stagnant" market.
Concerns are also mounting about whether rising interest rates and global trade disputes could usher in the next recession. Out of the last six recessions, four were accompanied by home price declines, although the 19% decline in the last recession was extreme, according to a separate report from Meyers Research.
