Denver Average Home Price Falls In October: Is this News?

You may have read this recent article in the Denver Post:  “Denver housing prices slip in October; could see slowdown in 2014“.

The “slip” cited in the article refers to the decrease in average home price from the “all-time highs” in 2013.  Is this real news?  Of course the average home price slipped from the highs earlier in the spring and summer.  This happens every year.  We always sell a mix of larger than average (more expensive) homes in the summer months – homes that are ideal for bigger families.  These families tend to like to move in the summer before the start of school, and they also avoid moving during the holidays.   Conversely, first time buyers and investors tend to buy throughout the year, and they buy small, cheaper homes, on average.  As a result, the average home price is much higher in the summer than in the winter.
No news here.   While the average price of homes might fall in October it doesn’t mean that your house is worth any less.

I always like how the editors tweak these types of articles, or at least the headlines, toward the gloom and doom.  While the average home price decreased from the summer highs, which happens every year, the prices of October 2013 actually increased substantially over October 2012.  The Post article could very well have been titled: “October homes prices up a staggering 9.5% from the same month in 2012!”  Of course, that would be too much good news and people might not read it…

Generally, I try not to place a lot of  importance on statistics of averages across the nation, states, or even cities.  We’ve all heard that the most important factor in real estate is “location, location, location.”  That’s because in every market there are many micro markets.  Comparing average prices  in North Aurora to those in the Denver Highlands would be more or less meaningless.   Similar to looking at the average temperature in Colorado to determine your wardrobe when you decide to move to Fraser, Colorado, one of the coldest towns in North America.   If you want to know the market in your neighborhood you have to look at your neighborhood — that’s all that matters.   If you want to know how prices have changed in your neighborhood check out our Price Change Map.

As for 2014, I agree with some of the conclusions of the economists cited in the Post article.  We had a massive spike in prices last spring, mostly due to a combination of Denver’s record low home inventory and a sudden jump in buyer demand as buyers rushed to buy homes when interest rates quickly jumped last spring.  We will indeed see a lower rate of growth than what we saw early in 2013.   I predict a steady,  slower, and healthier growth than what we saw last spring.