In metro-Denver, average sold prices have decreased since June. This news is usually alarming to most homeowners. Fear not. We professionals expected this to happen. In fact, it has happened every year for several years in metro-Denver.
Over the last several years, we have seen home prices follow the same pattern as seen in the chart. The market begins to pick up in February, ironically right after the Super Bowl! Prices rise very quickly between the months on March until they peak in June. The rapid increase in prices is caused by high demand throughout the spring. Then more sellers begin to list their homes in the summer while school is out causing inventory to increase. More inventory causes slightly less competition, so we see less bidding wars on homes thus lowering prices. Also, summer sellers expect prices to continue to rise as they have done all spring, so they list their home based on increasing sales prices. Without proper guidance from a trusted real estate professional, they often list too high. This is why we see price reductions in the late summer months.
For these reasons, prices begin to drop a bit as demand slows down through the late summer months. We will continue to see a slight reduction in prices until they level out around September. By the end of the year, prices end up higher than where they started in January but lower than the peak in the summer.