DENVER (KDVR) — What went up is coming down — at least a little bit.
Colorado’s housing market had been rising for years before kicking into warp speed during the 2020 COVID-19 pandemic as wealthy coastal transplants sought more living space and recreation opportunities. Home values launched into the stratosphere as housing stock plummeted and buyers entered bidding wars over Denver-area real estate.
Costs grew even more as the U.S. Federal Reserve raised interest rates in early 2022 to tame national inflation. With both mortgage rates and Denver-area housing values at record highs, a new buyer in the metro would pay nearly $200,000 in the first year of homeownership alone, according to a study.
Another study from financial adviser SmartAsset says the expense is finally having an impact, at least on demand if not prices. The Denver-Aurora-Lakewood area ranks 21st for cooling housing markets among the 100 largest cities, between Jacksonville and Tucson.
The SmartAsset study ranked cities based on how much demand and prices have fallen in each from August 2021-2022. The study considered how many sellers are cutting prices and by how much, the number of new listings and the average days before a home sells.
It isn’t the prices. Denver home sellers are apparently optimistic that they can still command at least some of the swollen prices recorded around the metro in the last two years. Homesellers are not slashing prices more in the Denver metro than elsewhere in the country, according to the report.
It’s demand for homes that means the market is cooling. The Denver-Aurora-Lakewood metro has the nation’s 13th highest ranking for a decrease in housing demand.