For the first time in seven years, median home prices in metro Denver declined year-over-year, according to a monthly update from the Denver Metro Association of Realtors.
The median price of a single-family home sold in February came in at $430,100, down 2.18% from the same month a year earlier. For condos, the median sales price declined 2.3% to $297,500 over the same period.
"Buyers are getting more power and sellers are not loving it. But there is something for both sides to love. Sellers are still doing OK," said Jill Schafer, chairwoman of the DMAR market trends committee and a Denver-area real estate agent.
After years of robust gains, falling prices add another twist into the dynamics between buyers and sellers. Will sellers, realizing waiting won't bring a better price, list more homes? And will buyers jump at the extra inventory hitting the market, or will they wait for a better bargain down the road?
Barring a future surge in prices, it appears the high for this real estate cycle was likely reached in April of last year for single-family homes at $455,000. For condos, the high came a month later at $306,331. Single-family prices are down 5.5% from that peak, while condo prices are down about 3%.
Median prices fell month-over-month in the second half of last year, so the annual drop wasn't completely unexpected. In January, the annual rate of change turned negative for Boulder, Douglas and Denver counties, according to a separate report from the Colorado Association of Realtors.
But price gains in Adams, Arapahoe and other more affordable counties were strong enough to keep the year-over-year number positive. That isn't the case anymore.
Historical median sales prices from DMAR weren't available before deadline. But using median prices from REColorado, the last annual decline for single-family homes, 1.9%, came in October 2011. For condos, a 2.7% annual decline was recorded in February 2012, marking a turn in the market precisely seven years to the month.
Median prices were much lower back then: $227,000 for a single-family home, and $119,000 for condos.
Schafer notes the bottom isn't falling out of the market. Activity picked up in February, despite it being much colder and snowier than usual. Home and condo sales rose 4.8% in February compared to January, although they remain down 10.9% year-over-year. And listings are spending an average of 39 days on the market, still a short amount of time.
Buyers, however, seem reticent, despite the drop in mortgage rates in recent months and a 47.3% increase in the supply of properties on the market compared to what was available a year ago. It remains to be seen whether lower prices are the missing ingredient needed to bring them out.
