Central Denver’s 2019 home prices end with a “bleh”. For the first time since 2011, the rolling twelve-month median price dropped (mid-year), and by the end of December we ended up pretty much where we started the first month of the year.
What does 2020 hold? The best future performance indicator for the market is the absorption rate, which measures how many months it would take to sell all of the homes currently on the market if they sold at the same rate as homes sold the previous 12 months. Right now, there is a 1 month supply of single family homes on the market (220 on the market and 2,590 sold in the past 12 months). A balanced market starts at around 4 months of inventory, so we are still in a very strong sellers’ market. As you move up in price point, the market softens, and around $1.7mm the absorption rate crosses into the balanced 4 month supply zone.
Given the continued strong sellers’ market that we’ve seen for the past nine years, we are quite confident that the bottom of the market is not going to drop-out in 2020. The bubble is not going to burst — there is no bubble. This year we predict a continued flat market, but would not be surprised to see pent-up demand push prices up 3% or 4%.