Colorado’s Real Estate Boom Flattening Out
Five people were in line as backup buyers when Melody Odekirk and her husband bought their suburban Aurora home 6 1/2 years ago.
She figured that it would be a matter of weeks before they sold their beloved five-bedroom, three-bath brick ranch home. Three months later, the price has dropped $45,100, to $249,900, and the Odekirks just found a buyer.
“I was worried about selling it too fast and the people wanting to move in before we were ready to get out,” Odekirk said. “If somebody came in and really loved the house, we would do whatever we [could] to get them in.”
Although low mortgage rates are expected to push sales to record levels in Colorado this year, there are signs that the state is flirting with becoming a buyers’ market for the first time in more than three years.
Home prices are expected to rise just 4% this year, compared with at least 10% in each of the past three years, economist Lawrence Yun of the National Assn. of Realtors said.
In addition, the number of homes for sale has risen in Colorado Springs and metropolitan Denver.
“The housing market hasn’t collapsed. It’s still very hot,” said Michael Beckerman of Coldwell Banker. “But compared to Colorado’s own standard of market activity, it has cooled substantially from the go-go days before the dot-com bubble burst, when people thought there was no end to the money cash machine.”
Throughout the West, housing markets are mixed.
It is a sellers’ market in Southern California; Los Angeles home prices have appreciated 18% in the last year, and San Diego prices have risen 21%, Yun said.
Las Vegas keeps setting records for sales of homes, but numbers are softer around Seattle, where unemployment was 6.8% in September, up from 4.8% a year ago.
Nationally, home sales are expected to tie a 1999 record this year, then calm down after more new homes hit the market next year, especially if interest rates rise, Yun and National Assn. of Realtors spokesman Walter Molony said.
The market shift in Denver comes after years of population growth and median sale prices that rose from $96,100 in 1992 to $227,700 this year.
Denver ranks 10th nationally among cities that the association compares for median prices. San Francisco was tops with a median price of $540,500.
Sales of mountain properties in Conifer and Pine Junction, often considered as second homes, have suffered a double whammy with this season’s wildfires and a slowing economy, Beckerman said.
In metropolitan Denver, single-family home listings in October were up 17% from last year, according to Metrolist Inc. Condominium listings were 24% higher, as units stayed on the market longer.
Paul Wiesner, chief financial officer for Coldwell Banker Residential Brokerage Colorado, said the 23,769 homes and condos on the market in October were the most for metro Denver since at least 1987, when there were 20,026 listings.
“The market has been hot for the last three years. You could pretty much sell a house within a month,” Wiesner said. “What you’ve got now is a more balanced market. It takes you three to four months to sell, so eventually you’re going to have more inventory.”
Steve McGuire, a broker associate with Re/Max Professionals Inc. in Littleton, said the low end of the market is brisk, but homes with sticker prices above $350,000 have suffered. He expects uncertainty over Iraq and the economy to discourage iffy customers from buying.
The softening market is hitting rentals too.
In the Capitol Hill neighborhood of Denver, Pearl Manor Apartments is offering $100 off one month’s rent for renewing a lease.
Elsewhere, property manager Renee Harvey has been lowering rents, rolling over unrented properties from month to month and spending more time on marketing in the past six months.
“I’ve been doing this for nine years, and I’ve never had to work so hard,” Harvey said.
Members of the Pikes Peak Assn. of Realtors, meanwhile, reported a 12-year high of 4,325 homes for sale in September in the Colorado Springs area.
Commercial markets are also slumping. Moodys Investors Service ranked Denver’s commercial real estate market the worst of 53 markets for investors.
Odekirk, 41, said she went three months with none of the 15 people who looked at her house making offers.
“When you’re paying double mortgages, it feels like a lot longer,” she said. “Someone’s going to get a good deal on this house.”