If buyers were expecting a bounty of homes to choose from this holiday season, they are going to be sorely disappointed. Sellers are playing the grinch as 2019 draws to a close.
New listings for single-family homes in metro Denver last month plunged by a third from October, dropping to 2,500 from 3,768, according to the latest Market Trends Report from the Denver Metro Association of Realtors.
New condo listings also fell to 1,151 in November from 1,657 in October, a 30.5% decline. And while activity drops with the temperatures, the declines are beyond those typically seen this time of year.
"The seller psyche is shifting," said Nicole Rueth, producing branch manager with the Fairway Independent Mortgage in Englewood.
Sellers may be hearing a message that now might not be the right time to sell, she said, and to wait until spring, when there will be more listings and activity.
New listings were so paltry that the active inventory of homes and condos that buyers had to choose from at the end of November was down 18.3% month-over-month and 7.2% year over year.
In February, the inventory had surged 52% year-over-year. Now it is shrinking again, which is a troubling development for buyers.
The inventory decline would have been worse if sales also hadn't taken a big tumble. They dropped 22.8% from October and 5.9% year-over-year.
Although affordability is weighing on buyers, it is hard to know what is keeping sellers on the sidelines. Consumer confidence is holding up, unemployment remains low, layoffs are restrained and wages are rising, Rueth said.
And yet, something doesn't feel right. There are rumblings of a recession on the horizon and the trade war with China and other countries continues to drag on the global economy.
The impeachment hearings might have caused some people to hold off, although Rueth said political events tend to weigh on the higher-end of the market more than the lower-end. And a snowier than usual November didn't help.
The median price of a single-family home that sold in November in metro Denver was $453,250, down 0.38% from October, but still up 5.52% from a year earlier.
The median price of a condo that sold in November was $312,000, up 0.97% from October and 3.5% from November 2018.
Last year, home prices rose 8% in metro Denver, and this year they are more likely to end with a year-to-date gain of under 3%, Reuth said.
That may not be sitting well with homeowners, who may have an incentive to wait to see if the market heats back up again. Given that many are sitting on a luxurious equity cushion and snuggling a low-rate mortgage, they can do that.
For the housing market's sake, the hope is they will come out in the spring, Reuth said.
