Homebuyer demand suffered a big drop in Denver in June, despite a surge in listings that came onto the market last month, according to an index from Seattle real estate firm Redfin.
“The market is not as crazy as it has been,” said Karla Kirkpatrick Adams, a Redfin agent in Denver. “Prices have increased to a point where it is pricing people out of the market.”
Redfin tracks the home tours its clients take and the subsequent offers they make, using that sample to get a pulse on demand in the larger market. A score of 100 on the index matches the three-year average of activity from 2013 to 2015. Scores below that reflect weakening buyer interest.
The Denver demand index came in at 36 in June, down from an index score of 129 a year earlier and the lowest monthly score captured since the index started in 2013. The 54.7 percent drop in June was the most severe among the 15 major metros that Redfin tracks.
Nationally, homebuying activity was down 17 percent, according to the index. Redfin attributed that to a lack of inventory that was frustrating buyers and keeping them away, not unlike how half-empty shelves keep shoppers away.
Denver has faced a shortage of listings for three years now. But the June home sales report from the Denver Metro Association of Realtors showed a 24.4 percent surge in listings in June vs. May, nearly six times the average increase between those two months.
Despite that surge in supply, unlike any seen in months, Denver buyers cut way back.
A big drop in mortgage rates following the Brexit vote has drawn some buyers back into the market in July. But Adams said overall homes are taking longer to sell. Some sellers panic after their homes spend more than a month on the market, even though historically speaking that isn’t a long time.
A separate report Tuesday from S&P/Case-Shiller showed Denver home prices in May continued to show the third strongest rate of appreciation behind Portland, Ore., and Seattle with a 9.5 percent annual gain.
