The Denver housing market is experiencing a slowdown after years of soaring price growth has prevented people from buying.
Home prices in Denver are 8 percent higher over last year, according to the S&P Case-Shiller index, slow compared to double-digit gains a couple years ago. But the increase is still ahead of the 6 percent rise in average hourly earnings over the same period.
''The local economy is still fantastic, all the fundamentals are there, but obviously wages are not keeping pace,'' Steve Danyliw, a Denver realtor tells CNBC. ''As the market continues to move up, buyers are being pushed out.”
The continued price increases have been largely influenced by a lack of affordable inventory. Construction costs in the area are high, and most new homes are being listed for more than $400,000, out of many middle class earners’ price ranges.
Over all, however, the housing market is not behaving as the textbooks say it should. Inventories remain low despite the recent increases, and new construction is slowing, not picking up.
Part of the problem, local real estate agents say, is that the furious pace of price growth has essentially gummed up the market, making homeowners reluctant to sell for fear of being unable to find a new home.