By most accounts 2018 was a terrific year for central Denver home sellers (click for map), as prices appreciated 8.7% from the previous year to a record median price of $640,000.
Low inventory was the main economic force that continued driving up prices. Sellers listed 4,553 homes on the market in 2017 and only 4,418 homes in 2018. While the trends appear much the same as the previous seven years, a deeper look shows that we may start 2019 with a slightly softer market than 2018.
The chart below shows that while inventory fell for the whole year compared to the previous year, during the fourth quarter it actually increased 15% compared to 2017.
Continued increasing inventory would be a welcome trend for buyers this spring, and may reduce some of the market frenzy that we saw last year. Still, we forecast that 2019 will continue to be a seller’s market and that prices will continue to appreciate, but not at the same rate as past years. We expect about 6% this year, which is still historically high.
Other factors such as rising interest rates, increasing material costs from recent trade wars, and fluctuating stock markets may further test buyers’ appetites for committing $640,000+ for a home in central Denver. Sellers are well advised to get their homes in tip-top shape, and to price to sell this spring. Buyers should not wait to purchase. Right now is the time to be looking, as prices will see their most significant adjustment in the next three months.