Colorado Real Estate News

Denver Housing Market Experiences Seasonal Slowdown

alexander-andrews-457319-unsplashAs the summer housing market starts to draw to a close and the expected seasonal slowdown starts to take root, prospective home buyers might find they have a few more choices before signing on the dotted line.

At the end of July, there were 7,643 single-family homes, townhomes, and condominiums on the market. That’s almost a 4% increase in the active inventory from a year earlier. The last time there were more homes on the market in a July was in 2015. The increase in inventory comes at a time when mortgage rates and home prices continue to rise. Although, prices on an annual basis are increasing at a slower pace than in the past few years. The average 30-year, fixed-rate mortgage rate is now hovering at about 4.5%. Which is still low by historic standards, but about a half of a percent higher than a year ago.

Meanwhile the average price of a single-family home sold last month was $529,124. Down 1.48% from July, but up 7.18% from July 2017. Buyer put 5,764 homes under contract last month, largely unchanged from June, but up 5.24% from a year earlier. Some 5,043 homes sold last month, a 15.65% plunge from July and an 8.54% drop from a year earlier. While the month-to-month may seem severe, it is not an unusual seasonal drop. In fact, in July 2017, home sales fell by almost 20% from June. The sales drop is likely largely due to the double whammy of rising mortgage rates and rising home prices.

On a month-to-month basis, even the luxury home market cooled in August. There were 206 sales of single-family homes and condos priced at $1 million or more in July, a 16.26% decline from June. Still, luxury home sales were up 17.71% from July 2017. The year-over-year increase of luxury homes in July, while the strongest of any price strata, was still substantially below the year-to-date 29.14% sales increase when you dig into seven months of DMAR data. Through July, buyers purchased 1,204 properties, compared with 1,002 in the first seven months of 2017. The total luxury sales volume this year is $1.95 billion, a 28.72% increase from the same period last year. And keep in mind that seasonal drops, are part of the natural cycle.

Despite slower sales and a rising inventory, the single-family home market ended with a 1.59-months of inventory, which is the equivalent of about 4.3 weeks. Meaning if no new supply was added to the market and the sales stayed the same, all the homes would be gone in a little over a month. Perhaps one of the strongest metrics that the sky is not falling is that the months-of-inventory, or MOI, was slightly lower in July than it was year earlier, according to DMAR. Such a low supply is a sign that Denver, overall, remains a strong seller’s market. And there are no signs that the end is near of the Denver bull market for housing.

Colorado Real Estate News

February 2018 Housing Market Report

February 2018 Housing Market ReportDenver, the most expensive housing market between the two coasts, hit an important milestone in February. For the first time ever, the average sold price of a single-family, detached home topped $500,000, at a record breaking $502,986. The year-over-year appreciation was up 11.78% from February 2017. The dramatic price increase came as the total sales volume posted a double-digit drop. The 2,002 single-family homes sold in February marked a 10.59% reduction in closings from a year earlier, DMAR data shows.

February 2018 Housing Market Report

Home prices are rising while at the same time mortgage rates are rising. Rates are now averaging close to 4.45% for a 30-year mortgage, while rates below 4% were available not long ago. Part of the reason home prices are going up so quickly, especially so early in the year, is because some people are bidding up home prices before they rise even more.

February 2018 Housing Market Report

Historically, when single-family home prices shot up, more consumers – especially first-time buyers – chose less expensive condos and townhomes. With an average price of $345,632, attached homes are significantly less expensive than single-family homes. However, condo prices have risen even more than single-family homes jumping 16.95% from February 2017.

February 2018 Housing Market Report

Another, often overlooked, reason the average price has risen so much is the mix of homes being closed. That is, more expensive homes selling in any given month can drive up the average price. Indeed, the $1 million and up price range showed the most improvement of any price strata from a year earlier. 102 homes priced at $1 million and over sold last month, a whopping 56.92% increase from the 65 luxury homes that traded hands in February 2017.

February 2018 Housing Market Report

At the end of February, there was a 7.83-month supply of unsold $1 million-plus homes on the market. That’s a 37.46% plunge from the 12.52-months of inventory for luxury homes a year ago. Overall, there was a 1.51 month supply of homes on the market, a slight increase from the 1.46 months of inventory on the market in February 2017. However, buyers will find slim pickings for homes priced between $200,000 and just under $500,000. In that price range, there is less than a month’s supply of unsold inventory.

February 2018 Housing Market Report

An uptick in the number of homes on the market, both on a month-to-month and a year-over-year basis is good news for prospective buyers. There were 4,084 houses, both single-family and attached, on the market at the end of February, a 5.56% increase from January and a 5.31% increase from February 2017. If inventory levels continue to rise, it could help to dampen the rising prices.

February 2018 Housing Market Report

Colorado Real Estate News

Denver Real Estate Market Experiences a Build-Up Of Inventory

September Market Stats 2017In September, Denver-area home sales slowed more than the typical seasonal slowdown. This may be a sign that if you want to close the sale of your home by the end of the year, you will need to make some adjustments.

There were 4,427 total home sales in September, an unusually large 21.6% drop from August and a 15.6% drop from September 2016, according to data from the Denver Metro Association of Realtors. By comparison, September 2016 showed a more typical, seasonal drop of 11% and 5.5% from the previous August and September 2015, respectively. Home sales showed big month-to-month drops across the board. The biggest price band drop was for single-family homes priced at $1 million or more, which experienced a 25.38% slowdown from August. “September activity in the single-family luxury market fell like the autumn temperatures resulting in a buildup of inventory,” according to Jill Schafer, Kentwood Real Estate broker and a member of the DMAR Market Trends Committee.

At the same time, luxury homes fared very well when compared to a year earlier. The sales of the most expensive homes soared 24.36% last month from September 2016. And homes priced from $750,000 to $999,999, showed the largest year-over-year, increase of any price band, jumping by 31.24%. On a month-to-month basis, single-family priced from $500,000 to just under $750,000, showed the second largest slowdown, with sales falling 24.34% from August.  In fact, on a month-to-month comparison, the only price range that showed an increase was for single-family homes priced between $100,000 to $199,999. While homes in that price range jumped 18%, only 26 homes traded hands, as there are few homes available priced below $200,000.

If you are house-hunting, now is a great time to consider buying a condominium or town-home. There were 1,893 attached homes on the market in September, a 9.68% increase from August and a whopping 19.96% jump from September 2016. The average sold price of a condo last month was $313,096, almost $163,000 less than the $429,597 average price of a single-family home sold in September. The sale price of both condos and single-family homes were down slightly from August, but were up 8.5% for single-family homes and up 9.6% for condos. Despite the slowing sales, there was only a 1.8-month supply of single-family homes on the market last month and a 1.5-month supply of condos. A market balanced between buyers and sellers has 5-to-7 months of inventory, so Denver is still a strong seller’s market.

Regardless of the slowdown last month, the year still is slightly ahead of where it was in 2016. In the first three quarters of this year, there have been 43,558 total closings, for a record sales volume of $18.85 billion. In terms of year-to-date sales, the market is 3.22% ahead of where it was last year. In terms of dollar volume, the market is 11.82% ahead of where it was this time last year.

Colorado Real Estate News

Home Sales in the Denver-Area Show Typical Seasonal Slowdown

Denver August Home SalesEvery market has a season. The Denver housing market is no different. In August, home sales in the Denver area showed a typical seasonal slowdown. With a market as hot as Denver, any cooling can seem like a bigger deal than it is. There were 5,324 single-family and condo/townhome sales in August, a 5.8% drop from July, according to the most recent report by the Denver Metro Association of Realtors. That is fairly typical month-over-month drop this time of the year and is a long way from a meltdown.

Home sales did fall 8.6% from August 2016. However, if you dig into the last year’s statistics, the year-over-year drop this year isn’t surprising. That’s because in August 2016, sales bucked the normal trend and actually rose a bit from July. Also notable is that the average price of all homes sold last month stood at $434,478. That is a 2.75% dip from July, but a record for August. August 2016, in fact, was the first August on record where the average price of all homes sold topped $400,000.

By the numbers, all home prices are up 8.17% from August 2016. And that’s a time when the inflation rate remains below 2%. Another way to look at is that home prices have been rising at 4 times the inflation rates. The good news is, the average price of a single-family home was $483,574, a record for an August, but down 2.21% from July. The average price of a home likely will not top $500,000, a milestone that seemed likely earlier this year.

There were 7,360 homes on the market last month, basically flat from July and up less than a half percent from a year earlier. August of last year marked the lowest inventory of any August on record and last month didn’t give house hunters many more homes to choose from.

What is interesting is that the active inventory of attached homes, mostly townhomes, surged in August. There were 1,726 attached homes on the market last month, a 4.7% increase from July and a whopping 17.2% from July 2016. So, if you want to buy a townhome you have many more choices than a year ago. The single-family inventory of 5,634 homes, dropped 1.2% from July and 3.76% from August 2016. By contrast, the inventory of single-family homes fell 1.21% from July and was down 3.76% from August of last year.

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

Denver Real Estate Market Shows No Sign Of Slowing Down

Denver Real Estate Market Shows No Sign Of Slowing DownLately, qualified home buyers in the Denver area have been delaying buying a home. They continue to rent in hopes that home prices will drop and they can snap up a relative bargain. But the latest data shows that isn’t happening. In April, as the spring buying season gathered steam, the average price of a single-family home in the Denver area hit a record $487,974. That is a 10.32% increase from April 2016. Not long ago, we were talking about the average price of a single-family home hitting $400,000. Now, an average price of $500,000 is appearing on the horizon.

What is happening in the Denver area is simply supply and demand. There are only 5,361 active listings on the market. An area the size of Denver could handle an inventory four times the current level. On the bright side, if you are house hunting the number of unsold homes on the market is no longer at a record low. In April, the inventory of homes and condos grew by 8.94% from March and 2.68% from the previous year. But the Denver area clearly remains a seller’s market, with only a 5.7-week supply of unsold homes.

The months of inventory would be even lower, if not for a statistical quirk regarding the lowest priced homes. There is a 3.33-month supply of homes priced below $100,000. But there are only 10 of them on the market, with three homes selling in that price range last month. At the other end of the spectrum, there was a 6.87-month supply of homes priced over $1 million in April, a 7.3 percent drop from March. A 7 percent change in one month is huge.

It’s a sign that savvy buyers who can afford the most expensive homes, are voting with their pocketbooks. In the first four months of the year, buyers have purchased a record $6.36 billion in single family homes and condos. That’s $536 million more than what was bought during the same period last year. This year 15,554 single-family homes and condos have traded hands, almost a 7 percent increase from the first four months of last year. To put that into perspective, that is more than all the owner-occupied houses in Littleton!

The market is telling us two things. First, it is a great time to be selling your house, with double-digit appreciation still taking place. Second, if you wait to buy a home, hoping that prices will fall, you probably will be disappointed.

Colorado Real Estate News

Home Prices Continue to Rise in Denver

Denver Home Prices Continue to RiseThe Denver-area housing market has never been tighter. According to the most recent report by the Denver Metro Association of Realtors, there were 3,989 active homes on the market in January. That is not only the lowest inventory level ever reported for a January, but also the fewest number of homes on the market ever. The record low inventory level resulted in a mere 1.41-month supply of unsold homes on the market last month. Here’s another way to look at it: if every home was sold and no new homes made it to the market, buyers would have no more homes to purchase in a mere six weeks.

Every price strata last month showed a drop in inventory levels from January 2017. Only homes priced at $1 million or more would arguably be considered a buyer’s market, with an inventory of nine months. However, even in that price range, there has been a year-over-year 14.3 percent drop in supply. For homes priced from $100,000 to just under $400,000, there is less than a one-month supply of inventory. Only homes priced between $750,000 and $999,999 would be considered one in balance between buyers and sellers, with about a 5.5 months inventory.

As expected, with such a low supply of homes on the market, home prices continue to rise. The average price of all homes sold last month topped $400,000, rising 8.35 percent to $402,979. The average price of a single-family home rose even more. Single-family home prices jumped 9.25 percent to $448,374. Overall, the sales volume of all homes last month topped $1.2 billion, an 8.31 percent increase from a year earlier.

As winter begins to wind down, with the confluence of a record low inventory and rising prices, now is a great time to call a real estate professional and put your home on the market. It’s an especially great time to sell your home, as mortgage rates remain low. With a 30-year fixed-rate hovering around 4.2 percent, it’s an increase from the very bottom but still extremely low by historic standards.

Colorado Real Estate News

Denver-Area Market Sees Increase in Home Supply

If the Denver-area home sales market was a publicly traded company, it would be one of biggest in Colorado.

In the first three quarters of 2016, buyers snapped up a record $16.7 billion in homes, according to the Denver Metro Association of Realtors. The sales volume topped the market cap – the total value of the stock – of local companies like Chipotle Mexican Grill, Da Vita, and Arrow Electronics. The sales volume of all homes was 7.46% higher than in the first nine months of last year. Turn the clock back four years to 2012 and the total sales volume is up about 74%!

The big reason sales volume has shattered previous records is because home prices have been doing the same thing. The average price of all homes sold at the end of the third quarter was just under $400,000, which is 10.5% higher than a year ago. The median, or middle, price was almost $350,000, up 11.4% from the end of the third quarter of 2015. At the end of September, there were 7,599 active listings on the market, slightly above where it was a year earlier.

But for the first time in history, the number of active listings in September actually surpassed the number of houses on the market from the previous month.

There were 3.71% more homes on the market in September than in August, defying the usual seasonal month-to-month dip. This means more homeowners are willing to sell their homes this fall rather than waiting until the spring. Buyers also would be wise to take advantage of the added supply. Not only do they have more homes to choose from, but they can guarantee they will be able to lock in today’s low mortgage rates.

Colorado Real Estate News

Denver Housing Market Mid-Year Review

Denver Housing Market It’s time to review the Denver-area’s housing market performance in the first half of the year. For the first time ever, total home sales eclipsed $10 billion. According to a recent report by the Denver Metro Association of Realtors, from January through June, buyers paid a record $10.17 billion for single-family homes, condos and townhomes. That is a 7.21% year-over-year increase from the previous record of $9.486 billion, which was set in the first six months of last year. Record dollar volume occurred despite total sales dipping by 2.4% from the same period in 2015. That is because the average price of all homes sold year-to-date in the Denver market is approaching $400,000, a 9.84% increase from where home prices stood a year earlier.

One reason prices are so high is that there still aren’t enough homes on the market. Some 34,619 new listings came on the market in the first half of the year, a 1.3% dip from last year. The good news is the number of active listings, the actual number of homes for sale, was up 9.7% from the first six months of 2015. The bad news is that you don’t have to look back too far to find more homes available for house hunters. There were 12.8% more homes for sale in 2014. And go back to 2012, just as the housing market was starting to recover from the Great Recession, there were 37.8% more homes on the market.

What does the second half of the year hold? No one knows for sure, but one thing buyers can expect to continue is the unexpected gift of low mortgage rates. Rates could even hit an all-time low this year. A silver lining of Brexit, Great Britain’s decision to leave the European Union, is that it has driven down interest rates. A year ago, just about every expert was predicting rates would rise this year to about 4.5%. Instead, rates for a 30-year loan are hovering around 3.5%. Low rates could bring even more buyers into Denver’s market. And unless the supply dramatically rises that means Denver record homes prices will go on higher.

Colorado Real Estate News

Denver Area Sees Increase In Home Sales In The First Quarter

First Quarter Stats | Denver Housing Market

To get a true gauge of where the housing market stands, it’s helpful to analyze it from a quarterly basis. There can be a lot of “noise” in home sales data on a month-to-month basis, and even when comparing one month to the same month in the previous year. Home sales, for example, almost always fluctuate from month-to-month based on seasonality. Maybe a year earlier there was a big snow storm which slowed sales for a week, making the year-over-year gains appear larger than they were. A lot of that noise can be eliminated when looking at bigger blocks of time.

When we go to our “quiet place,” of statistics, the Denver-area housing looks pretty good. In the first quarter of this year, the Denver-area boasted a record $8.9 billion for all homes sales. This number is up nearly 12 percent from the first quarter of 2015. According to the Denver Metro Association of Realtors, sales were up just under 2 percent in the first quarter of 2015. But the number of new listings brought to market in the first quarter of this year was flat when compared to the first quarter of last year. The dollar volume was able to increase because the average and median prices of all homes sold grew by 9.8 percent and 10.3 percent, respectively.

Condo prices showed even more sizeable percentage gains. The average price of condo in the first quarter rose 13.6 percent to $281,291, while the median price rose 15.6 percent to $227,350. Perhaps the best news, however, was that the 4,482 active listings on the market were 9 percent higher than in the first quarter of 2015.

The increased supply might bring the appreciation of homes to a more reasonable 5 percent to 6 percent, instead of the unsustainable double-digit, or near-double digit, increases the Denver market has been experiencing. With more homes on the market, if you sell your house, it will be a bit easier to find a new home than it was in the first part of last year. However, with a strong appetite from buyers, the market is still starving for more homes to sell. You don’t have to look too far back for proof. The number of active listings is down 26.5 percent from the first quarter of 2014!