colorado's housing market may be investable as 'price cut rate just hit 42%,' suggests market executive
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By AJ Fabino | Published on July 23, 2024
Real estate analytics point to potential investment opportunities in Colorado, particularly in the popular Denver metro area.
Nick Gerli, CEO of Reventure, a real estate analytics tool, highlighted on Wednesday that the price cut rate in Denver has reached 42% of all listings in June, the second-highest on record.
“Price cuts are getting ugly in certain housing markets,” Gerli said in a Wednesday tweet. “Nearly half of sellers are feeling pressure to reduce the price. A clear indication of a declining market.”
The trend isn’t isolated to Denver. Colorado Springs tops the list with a 45% price cut rate, Gerli said, indicating heavy downward pressure on home prices. Other markets seeing similar trends include pandemic boomtowns like Austin, Huntsville, Tampa, Dallas, and Jacksonville.
However, the Colorado Association of Realtors paints a more nuanced picture. While inventory has indeed increased – up 24.3% for single-family homes in the Denver metro area compared to a year ago – median prices are still daunting for many, which has triggered price reductions in the state's major metro areas.
The median price for single-family homes in the Denver metro area is $637,000, up just over 1% year-over-year.
Interestingly, Gerli’s data reveals variation within metro areas. In Denver, some ZIP codes surrounding the urban core see up to 55% of sellers cutting prices, while others on the east side show only 25% doing so.
“The tables are starting to turn for buyers and sellers in Boulder and Broomfield counties," Kelly Moye, a Boulder-area realtor, noted in a report. "New listings continue to hit the market, and buyers remain watchful and waiting.”
The discrepancy between high inventory and sustained prices indicates a market dynamic waiting for flux. Patrick Muldoon, a Colorado Springs-area realtor, warns of broader economic factors. “Are we entering a corrective phase? It appears many indicators are pointing in that direction,” he said, citing manufacturing contraction and concerns in the commercial real estate market.
The current market conditions present a dichotomy: while price cuts suggest a buyer’s market, sustained high prices indicate ongoing seller strength. The tension creates potential opportunities for savvy investors who can navigate the localized nature of the trends.
However, challenges remain. The CAR Housing Affordability Index remains near all-time lows, down 4.4% in the metro area compared to last year, the Colorado Association of Realtors said.
High interest rates, rising insurance costs, and property tax hikes impact buyer behavior.