Colorado Real Estate News

Home Prices Appreciate at A Slower Pace in Denver

Home Prices | Denver Real Estate

This past month, many people celebrated Independence Day by watching fireworks, enjoying a barbecue, or perhaps escaping to the mountains. This year, Denver’s continued robust housing market was another cause for celebration. The Denver Metro Association of Realtors released its latest report on home sales activity in the metro area on the 4th of July. The report found the local housing market remains strong. While home prices are appreciating at a slower pace than in recent years. That is good news for prospective buyers, who on average are no longer facing double-digit price increases. At the same time, sellers are still enjoying solid increases in the value of their homes.

The average price of a single-family home sold last month set a new record of $539,934. That is less than a 1% increase from May and an 8.75% increase from June 2017. When you throw condos and town homes into the mix, the average price of all homes hit a record of $492,029, up slightly more than 1% from May and an 8.8% increase on a year-over-year basis.

Buyers also have more homes to choose from in June than they did in May. There were 7,436 active listings on the market in June, up 15.52% from May. Such a big percentage increase from May is not unusual. This time in 2017 and 2016, for example, the month-to-month percentage jumps were about 20% and 24%, respectively. Year-over-year, the number of active listings increased by 5.34%. The last time more active listings were on the market was at the end of June 2014. At that time, there were 7,791 homes on the market.

The number of homes placed under contract also picked up a bit in June. There were 6,043 homes placed under contract in June, a 2.46% improvement from May and a similar increase of 2.55% on a year-over-year basis. In the first half of the year, 37,311 new listings came on the market. That’s a 1.45% increase from the 36,779 new listings in the first six months of 2017.

Sales activity in the first half of the year was not bad considering rising home prices and interest rates. There were 27,228 total homes sales in the first six months of 2018. Which is a 3% drop from total sales in the first half of 2017. The average sales price of all homes in the first half of the year was $476,100, a 10.47% percent jump from the average sales price in the first half of last year. Despite the dip in sales, thanks to higher prices, the total sales volume in the first six months of the year hit a record $12.96 billion, a 7.08% increase from $12.1 billion in the first half of 2017.

Yet, the market remains tight. There was only a 1.43-month of inventory of single-family homes available to buyers at the end of June. That translates to slightly more than 6-week supply, which, believe it or not, is almost an 11% increase in MOI from June 2016. For homes priced from $200,000 to just under $400,000, there was less than a one-month supply of homes on the market. The luxury housing market is the most balanced of all markets, with a 4.64-months of inventory of homes priced at $1 million or more. That is about a 17% drop in the MOI for luxury homes.

Kentwood Real Estate broker and DMAR Markets Trend Committee member Jill Schafer described the luxury market as “astounding.” In the first six months of the year, a record 978 luxury single-family homes were sold, a 32.52% increase from the same period in 2017. The sales volume of luxury single-family jumped 32.6% from a year earlier to $1.486 billion. The total sales volume for luxury hit $1.63 billion, when including luxury condos.

Colorado Real Estate News

Denver Area Housing Market Experiences Dip in Home Sales

July Market ReCap | Denver Market StatsWhile Denver experienced a hot summer, July home sales in the Denver area reflected more of a cooling trend.

July showed a bigger dip in home sales than the typical month-to-month seasonal slowdown. According to the latest report from the Denver Metro Association of Realtors the sale of single-family homes, condos, and townhomes dropped 19.66% from June and 8.29% from July 2016. On a month-to-month basis that’s almost twice the percentage drop from July 2016 from June 2015. However, last month’s year-over-year decrease was about half the decrease experienced from July 2016 from July 2015, so by that metric, sales were stronger than they may appear at first blush.

One reason sales may have dropped so much from June is because prospective buyers had little to choose from. There were only 7,352 active listings on the market last month, the lowest ever for a July, according to DMAR. In fact, it was the third consecutive July to have a record low for that month. The average sold price of a single-family home continues to hover at just under $500,000. The average sold price last month for a single-family home was $496,382 – basically flat from June, but up 8.43% on a year-over-year basis.

The brightest spot last month was for luxury homes. Homes priced at $1 million or more bucked the trend of falling sales on a year-over-year basis. Last month was the best July ever for luxury homes, according to an analysis of the market by Kentwood Real Estate. Some 130 luxury single-family homes traded hands in July, a 14 percent increase from the 114 in July 2016, according to Kentwood. The closed sales volume for luxury single-family homes jumped 15.3 percent to $198.934 million from $172.567 million, Kentwood reported. The most expensive homes on the market also sold 13 percent faster than last year, with the average days on the market dropping to 94 from 108.

On a year-to-date basis, luxury home sales have been even more impressive. In the first seven months of the year, the closed dollar volume topped $1 billion, the first time it has topped $1 billion that early, shows Kentwood’s analysis. The $1.3 billion in sales represented the closings of 808 luxury home sales in the first seven months of the year. That is a 28.7% jump in the number of sales and a 28.1% jump in the dollar volume from last year, according to Kentwood.

The decrease in sales activity is frustrating if your home hasn’t sold yet this summer. However, overall, the Denver housing market remains a strong seller’s market. July ended with only 1.61 month of inventory, or about seven weeks. That is a 2.4% drop in MOI from a year earlier.

A balanced market has a 5- to 7-month supply of unsold homes, so with a mere seven weeks, Denver is a long way from being a market where neither the buyer nor the seller has the upper hand.

Colorado Real Estate News

2015 Denver Real Estate Market Recap

460635135If the Denver real estate market took buyers and sellers on a roller coaster ride last year, it took them in one direction – up. At least as far as home prices were concerned.

According to data compiled by the Denver Metro Association of Realtors, every month in 2015 home prices were higher when compared to the same month in 2014. They weren’t up by a small amount either. The median price of a single-family home rose by double digits in 10 out of 12 months last year.

There were only three months when the average price of a home sold in 2015 increased by less than 10 percent on a year-over-year basis. During these months, single-family home prices were up a little under 10 percent, with the exception of the 8.5 percent year-over-year increase in December. Not bad, especially when you consider that the inflation rate last year was less than 2 percent.

While total sales of single-family homes were flat in 2015 from 2014, dollar volume rose by 12.1 percent to a record $16 billion due to the rising price of homes. In fact, you were better investing in real estate than in the stock market last year. The year ended with the average sales price of a single-family home at $404,811, the first time ever that the average cracked the $400,000 mark for an entire year.

But the market below $400,000 is where the real action was in 2015. Of the 39,435 single-family homes that sold last year, 59 percent were priced between $200,000 and just under $400,000. That was reflected in the supply of unsold homes by price tranches. For homes priced from $200,000 to $299,999, there was a mere 1.5-weeks supply of unsold homes on the market at the end of 2015. There was less than a 3-week inventory of unsold homes priced between $300,000 and $399,999.

Overall, the year ended with a 1.19-month supply of homes, slightly less than 1.28-month supply at the end of 2014. Even for homes priced at $1 million or more, there was only 6 month of inventory at the end of 2015, which is considered a balanced market.

Will residential real estate continue to climb double digits this year? It’s unlikely. But there is nothing wrong with homes appreciating at a more reasonable 4 to 6 percent rate in 2016.

Given the rocky start to the stock market in January, no one would blame you if you invested in a home instead.