DENVER -- While not totally unexpected, it's still a stunner.
For the first time, the average price of a single-family home sold last month in metro Denver topped a half million dollars, according to the latest Denver Metro Association of Realtors Market Trends Report.
"It's a little bit of a shock for people moving into this market," said realtor Libby Levinson. "If they're moving in from a hot market, like New York or San Francisco, they aren't all that surprised. But those moving in from areas that haven't been so hot, it's a big adjustment to wrap their heads around paying significantly more."
Single Family Homes
According to the report, the average price of a single-family home sold in the 11-county metro area in February was $502,986, an 11.78 percent increase from last year.
Levinson said the half million dollar mark is a bit of a "psychological barrier" for many people who are looking to buy. But it's "great news" for those who want to sell.
"They're seeing nice returns on homes they purchased 5, 10, 15 or 30 years ago," Levinson said. "They're pleased."
Buyers, retirees on fixed incomes and renters aren't as pleased.
"A half million dollars? That's horrible," said native Coloradan Mary Mascarenas. "Who can afford that? That's why many of the natives are moving out. We can't afford to live here."
Mascarenas, who sold a condo years ago, said she can't afford to buy a house now.
Some of her neighbors, who are retirees, are grappling with larger property tax bills.
"I was flabbergasted when I got my property tax bill," said Pete Mirelez. "It had gone up nearly $300."
Mascarenas said she has considered moving out of the Denver area because of high living costs. Mirelez has too.
"It seems like it would be cheaper to move to Pueblo or Colorado Springs," she said.
Condo prices are also skyrocketing.
Last month, the average condo sold for $345,632. That's a whopping 16.95 percent increase from February of 2017.
Levinson said it's not just people moving to Colorado for the first time who are in for sticker shock.
"I have some clients I've worked with who took advantage of the market, sold their home to be closer to family and three years later, they're really missing Denver. They miss Colorado, and they want to move back. They're priced out of the market now," she said.
According to HSH.com, a mortgage research firm, Denver metro homebuyers need an average salary of $79,180.65 to afford a median-priced home.
Levinson told Denver7 that some homebuyers are having to get creative to purchase a home these days.
First-time homebuyers are looking at taking on a renter, to help offset costs, Levinson said.
The realtor added that inventory is larger than it has been, but is still fairly low.
"We're looking at 10 years before the housing market corrects itself from the low inventory rates that we have now," Levinson said.
When asked if that means we'll see continued price hikes for 10 more years, she replied, "If I had a crystal ball, I'd be doing very well. But we don't anticipate things slowing down."
Levinson told Denver7 that the biggest demand is in the $300 - $400 thousand price range, but the biggest percentage increase is in the luxury market — homes that cost more than $1-million.
"We saw a 57-percent increase in single family (luxury) home sales year over year," she said, "which is a huge increase."
When asked why more people were jumping into that section of the market, Levinson said, "They're sick of waiting. They're not seeing prices go down. They're jumping on them."
Levinson also said interest rates are a factor.
"I joke with my clients that I feel like I've been Chicken Little, saying, 'the rates are going to go up, the rates are going to go up.' We're starting to finally see that, so the purchasing power that people have is decreasing as time goes on as the interest rates go up and as home prices go up," she said.
For more information about the DMAR Market Trends Report, click on this link: