We’re in the midst of our summer buying season and it feels a lot more like fall. New listings and closed volume are down ~30% year-over-year, so things are a bit weird right now with fewer deals happening during “busy season” on the Front Range. This is a direct effect of the “high plateau” thesis in which housing prices stay elevated, even at higher interest rates, because there’s less supply and no forced selling in the market. This all could change very quickly as the US grapples with another debt ceiling showdown. While it does appear that both sides left their negotiation on May 16th feeling much more constructive, there are still a lot of things that need to happen before we can call the “all clear.”

We’re in the midst of our summer buying season and it feels a lot more like fall. New listings and closed volume are down ~30% year-over-year, so things are a bit weird right now with fewer deals happening during “busy season” on the Front Range. This is a direct effect of the “high plateau” thesis in which housing prices stay elevated, even at higher interest rates, because there’s less supply and no forced selling in the market. This all could change very quickly as the US grapples with another debt ceiling showdown. While it does appear that both sides left their negotiation on May 16th feeling much more constructive, there are still a lot of things that need to happen before we can call the “all clear.”

The unofficial start to the summer buying season is March because that’s the first month a buyer could go under contract and realistically achieve a summer move. From here, we expect a pick-up in demand through the end of July in which prices historically accelerate rapidly. It will be interesting to see what happens this year given that mortgage rates are back above seven percent, and the average price of a sold home in the Denver metro is up over 40% since 2019. At some point, we believe the market will hit a high plateau where consumers just can’t afford to pay high prices while low supply keeps the market supported. Indeed, last month was the first month (outside of May 2020…) when the average price of a sold home in Denver was down year-over-year going back to the fall of 2014. This is significant because the average list price of a home is up 11% as of the end of the month – something will definitely have to give.