Realtor.com, the official website of the National Association of Realtors (NAR), predicts slower housing sales and higher prices for properties with the best value. Danielle Hale, the chief economist with Realtor.com, recently reported that despite a slowdown in metro Denver, the overall housing market will “remain on solid footing.”
Hale also reported that repeat buyers are likely to drive up the median price of homes in Denver as the mix shifts away from entry-level purchases. Realtor.com is calling for a 6.7 percent decline in home sales in metro Denver while the median price of a home in the Denver area will rise 6.8 percent.
According to a report in The Denver Post, households under the age of 34, the prime market for entry-level properties, is on the decline in the Denver area, while households comprised of move-up buyers ages 35 to 44 and 45 to 54 is expected to grow 5.2 percent and 7.2 percent, respectively, states the NAR report. Move-up buyers who have built up equity after years of strong gains, will remain active, while more entry-level buyers will get sidelined because of higher borrowing costs, so prices should rise as sales slow down a bit.
On the national scene, sales will also slow down as buyers cope with higher lending costs. The Home Price Index from Case-Shiller and S&P CoreLogic, reports that appreciation is now running close to two percent. Ralph B. McLaughlin, deputy chief economist for CoreLogic, says that the supply side will see slow but steady growth in inventory that is providing relief to homebuyers. On the demand side, years of price growth outpacing income growth, as well as rising mortgage rates, is making the cost of buying a home increasingly expensive, notes McLaughlin.
The index for metro Denver is still running above the national average, but will be down from 2018. The gain was 7.3 percent in September, down from a 7.7 percent pace in August and 8.6 percent in April. The Denver area continues to have strong home prices, surpassed only by Las Vegas, San Francisco, and Seattle. According to The Denver Post report, rates are positioned to rise through 2019 while home prices will continue at a moderate pace.