Colorado Real Estate News

Real Estate Market Trends

High Buyer Demand in Metro Denver

A record number of Denver-area homes on the market went under contract in June, home prices are on the rise, mortgage rates are a record low and the market is experiencing near record-low housing inventory. These factors are making for a strong seller’s market.

In June, a record number of homes, 7,676, shifted into a pending sale status, up 16% month over month and 27% year over year. Additionally, weekly home closings were back above 2019 levels, ending 11-weeks of a COVID-19 induced housing slump.

Home Prices Rising

In March, pre-COVID-19, the average price for a residential property in metro Denver zoomed above $500,000 for the first time, to $513,535. That price then dipped back down below the half-million-dollar mark during the home-showing shutdown and uncertain economic times in April and May. In June, however, average prices bounced back up to $509,736, the second-highest average price for residential real estate in Denver.

Luxury Market is Coming Back

In June, 7,364 homes were put up for sale in all housing price points, but demand was even higher. More homes were put under contract than came on the market for sale. Less inventory meant home sellers had more power. The only segment of the market in which homebuyers had the edge were condos priced over $1 million. Overall, after the halt earlier this year as a result of showing restrictions and consumer uncertainty stemming from COVID-19, the Luxury Market is picking back up.

The number of homes sold in the single-family luxury segment was up 100% in June to 230 from 115 in May, and up to 15 from eight for luxury condos, an 87.5% increase month over month. At the end of June, there were 413 pending sales, up 38% from last month and an impressive 59% from last year. 

Year to date, Luxury Market listings were up 1.76% over last year. There has been double-digit growth since 2016, so under 2% growth is a significant figure that depicts the true damage stemming from COVID-19.

*Written July 7, 2020. Updates may be available after this date.

Colorado Real Estate News

Real Estate Market Trends

New listings flood the metro-Denver housing market in May

As stay-at-home restrictions stemming from COVID-19 loosened and businesses began phased openings in May, metro Denver had a surge of new listings hit the housing market, up 56% month over month to reach 7,312. Some of the surge can be attributed to sellers putting their homes back on the market after withdrawing them when showings were halted back in March.

Home sales down as expected in May, but homes under contracts skyrockets

The number of sold homes was down 20% month over month and 49% year over year in May, following the weeks of strict home-showing restrictions. The average sold price of a home dropped slightly, back below $500,000 to $495,925. That was 1.24% lower than April but 2.43% higher year to date.

Notably, homes under contract increased a substantial 115% from the previous month.

Home sellers had the upper hand, except in the Luxury Market

There were 7,170 active listings at the end of May, 4.6% more than April but 19% less than the previous year. Home sellers had the upper hand with low inventory in all price ranges except for homes priced over $1 million, where there was 9.5 months of single-family inventory and 25 months for condos. Anything over six months is considered a buyer’s market.

Only 115 homes sold and closed for $1 million or greater last month, down 29% from April and 59% year over year. The closed dollar volume in the luxury segment in May was $174.4 million, down 24.4% from April and nearly 60% year over year.

While the last few months were slower stemming from the pandemic, year-to-date data reflects how hot the metro-Denver real estate market was at the beginning of the year. For example, new listings year to date for single-family luxury homes is only down 1.47% and luxury condos are up 10.45% compared to this time last year.

Colorado Real Estate News

Real Estate Market Trends

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Dramatic shift in real estate since March.

 

Real estate in metro Denver, Fort Collins and the Front Range was primed to be one of the strongest on record at the beginning of March, but took a swift turn later in month due to the impacts of the pandemic. Stemming from Colorado Governor Jared Polis “Stay-at-Home” Executive Order for the entire state on March 25, real estate was classified as an essential service – and the way real estate is transacted has changed significantly.

 

As a company, Kentwood Real Estate has identified ways to safely comply with the order while facilitating transactions that really need to happen – and help clients who very much need guidance right now.

 

Virtual tools are being leveraged and they have proved to work well for homebuyers and sellers today, such as listing photography, virtual tours, e-signatures on contracts and contact-free closings. There are even new components of a contract, like the COVID-19 Addendum that allows a transaction to be extended in the case a homebuyer or seller is exposed or quarantined. These changes are necessary to keep our community safe, and ultimately the health and safety of our fellow neighbors is the most important factor when considering how to responsibly serve homebuyers and sellers.

 

As elements of the executive order begin to be lifted, these virtual tools will remain common practice and will continue to be necessary to maintain the safety of our community.

 

The real estate market throughout Colorado is in a healthy position to come out of this unprecedented situation with strength. There remains a lack of supply and high demand, and that is what keeps prices stabilized and even increasing. While the second half of March notably saw a significant number of homes taken off of the market, they will begin to come back on the market in the near future. The pent-up demand will be evident over the summer, and anyone thinking of selling in the next few months will be able to successfully do so.

 

*Written April 17, 2020. Updates may be available after this date.

Colorado Real Estate News

Real Estate Market Trends

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How the Coronavirus is Impacting the Denver Housing Market

Kentwood Real Estate is monitoring the ever-changing real estate landscape stemming from the coronavirus COVID-19 situation. We are staying informed and following the guidance of the CDC, Colorado Department of Public Health and the National Association of REALTORS® to ensure we are providing our clients with the ultimate in ethical, professional representation – we will take all measures to ensure a safe, productive experience.

 
What we are seeing in the metro-Denver residential real estate market today is that overall buyer demand in the local market is keeping activity strong. Historically low interest rates are motivating buyers, and we continue to see multiple offers. While many sellers are continuing to list their homes, some are choosing to pause temporarily. In the case more sellers wait, there will be an increased strain on housing inventory.


Housing Inventory Challenges

In February, while the stock market struggled with coronavirus fears, real estate stayed strong. Month over month, 5.6% more homes came on the market, 7% more homes shifted into a pending status, and 3% more homes closed.

 
The month ended with only 4,835 active listings, down 2% from January and nearly 20% year over year. For perspective, 5,083 listings went under contract in February; so, figuratively speaking, only 39 new listings came on the market that didn’t go into contract.


The ‘New’ Home Showing

To accommodate buyers in today’s new normal, listings are sanitized ahead of showings, and hand sanitizer and booties are readily available. Furthermore, virtual home tours are quickly growing in popularity. Facetime to more advanced 3-D technology are being utilized and becoming a preferred method of house hunting by many.

 
Real estate remains a good investment. We believe the security of real estate as a safe haven from both a psychological standpoint and an investment standpoint will resonate in future weeks and months. Real estate has always weathered economic turmoil in the long run, and will do so now.

Colorado Real Estate News

Real Estate Market Trends Article

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The New Year Kicks Off Briskly for Denver-area Real Estate

In January, a massive influx of new homes came on the market in metro Denver but were quickly scooped up by homebuyers.

 

While 4,853 new listings hit the market, up 89% from December, January ended with 4,941 active listings because homebuyers placed 43% more homes in pending status month over month which diminished the housing inventory surplus.

 

Contributing factors to the market heating up quickly included continued low interest rates and 18 days above the average temperatures in January.


On the Heels of a Slow December

In the entire residential market, there was about a 35% drop in the number of closed homes and sales volume month over month in January which was a reflection of the slower market activity at the end of 2019. As usually occurs this time of year, the days on the market were longer, averaging out to 45 compared to 41 in December.


Steady Home Prices

The average single-family home price was down from its summer highs, but higher year over year by 6.86% to $532,494. The picture is a little different for condos that experienced a 5% month-over-month drop in average price to $355,754, which is also down 0.37% from the same month last year; representing the first price drop in the month of January in at least the past four years.


Homebuyer Advantage in the Luxury Segment

In the Luxury Market, homes priced $1 million+, months of housing inventory increased to 6.92 for single-family homes and 8.5 for condos, up 41% and 68% month over month respectively. So, luxury homebuyers are not having to compete as much as other price segments.
Year over year in January, 11.7% more single-family homes and 20% more condos closed in the Luxury Market. The number of homes that closed in the entire residential Luxury Market was up 12.6% and total sales volume was up 4.7% from one year ago. However, sales volume and the number of homes closed in the entire luxury residential market were both down 46% month over month.

Colorado Real Estate News

Metro Denver is Still a Seller’s Market

Metro Denver is Still a Seller’s Market Home-Seller-Market

Fact: Housing inventory under five months is considered a home seller’s market. In Metro Denver, the month of September ended with 2.04 months of single-family home inventory and 2.12 months of condos for sale, which clearly indicates we are still in a seller’s market.

 

While inventory has been steadily increasing over the past several months, September still only ended with 9,286 active listings. For comparison, the record-high housing inventory for the month of September was in 2006 with 31,450 active listings, and 2015 represented the record low with 7,516.

 

The Luxury Market is the Exception

The price segments for which homebuyers have gained more negotiating power are condos priced between $750,000 and $999,999 and the single-family homes priced over $1 million.

 

If buyers are wanting to buy a single-family luxury home, now may be the time. With over six months of inventory for homes priced $1 million plus, we’ve moved from a balanced market slightly into a buyer’s market in the luxury segment.

 

Housing Price Appreciation Has Slowed, but Has Not Reversed

Overall in the Denver-area residential market, while prices have decreased month over month, the average sold price of a home in September was still up 6.06% year over year and 2.52% year to date, $483,734 and $487,814 respectively. Year to date, the close-price to list-price ratio was at 99.31% in September, whereas it has been slightly over 100% since 2015.

 

Month over month, single-family homes in the Luxury Market had price depreciations with homes selling 96.49% from list-price to close-price, down 0.88% month over month and 0.42% from one year ago. Slowing down too was the single-family sales volume that fell 16.47%month over month but was still up year over year with an increase of 45.09%.

 

In general, you could say we’ve been turning from an extremely fast-paced market to a slower moving, healthier one this year.

Colorado Real Estate News

Is it a Seller’s Market for Luxury Homes?

Sellers MarketIs it a Seller’s Market for Luxury Homes?

Has the pendulum officially swung in favor of a buyer’s market for luxury homes priced $1 million and up?

In January, there was 7.65 months of housing inventory for the luxury segment; so, technically speaking, the answer is yes. The industry’s standard definition of a seller’s market is six months or less of inventory currently available, and a buyer’s market is seven months or more.

However, coining the luxury market as a buyer’s market comes with a caveat as it is not so ‘black and white.’ The luxury market in sales velocity is very dependent on the type of property, neighborhood, year the home was built, how updated it is, and so forth.

In this high-end price segment, the Denver area has only just gone over seven months. And when you look at other factors, like days on market, conditions to sell are still great. From 2016 to 2018, the median days on market has ranged from 71 to 84 in the luxury segment. Last month, median days on market was at 41!

So, home sellers must be cautioned not to despair that they are no longer in a “seller’s market,” they just need to manage expectations and price their home right. Home sellers are still in a robust market, in a city with good in-migration, and a great lifestyle.

More Housing Choices is Good for Homebuyers and Sellers

In January, the number of new residential listings for all prices ranges increased 109.7 percent from December to 4,821, an increase of 13.6 percent year over year. Active listings were up just 5.45 percent from the month prior, and up 52 percent compared to 2018’s record-low January reaching 5,881. For comparison, the number of active listings is still significantly below the historic average in the month of January of 13,469 (1985-2018).

So, even though the Denver area is still a seller’s market in most price ranges, there’s no doubt this is the best time to buy in a long time. With more choices and interest rates lower than expected, homebuyers placed more contracts in January compared to December, so more sales are expected.

While buyers are taking advantage of their housing choices, home sellers are still seeing appreciation with the average sold price up from $448,132 in January 2018 to $461,101 in January 2019.

All in all, now is a good time for buyers and sellers.

Colorado Real Estate News

2019 Promises Lots of Opportunity in the Denver Real Estate Market

Opportunities in the Denver Real Estate MarketHomebuyers and sellers are seeing a lot of opportunity in the metro-Denver real estate market as of late.

Since 2012, homeowners have received incredible appreciation. For those considering selling their home to move-up or to tap into their equity, now is an ideal time to do so. In addition to being in the midst of a seasonal slowdown, over the last few months, the market has been shifting toward balance creating conditions that benefit both buyers and sellers. So, what exactly are these conditions?

More Home Choices for Buyers and Continued Strong Home Prices for Sellers

In November, year to date, housing inventory has increased 46.76 percent compared to last year in the residential market (single-family and condos), but was down 11.82 percent from last month. Those figures reflect that fewer homes sold in the Denver area in November, down 17.27 percent from October, and that dropped the number of sales year to date to less than any in the past three years. For perspective, though, the market has been in the fast lane for several years and is simply shifting to more neutral conditions.

The low months of housing inventory will keep homes prices strong. While the average sold price of $462,344 was down 6.3 percent from the peak price mid-year, it is up 6.47 percent year over year.

Seller’s Market for Homes Priced Under $1 Million

Single-family homes priced under $1 million had three months or less of inventory at the end of November, showing sellers still had control in the bulk of the market. Anything under five months is considered a seller’s market and over six months is a buyer’s market.

Buyer’s Market for Home Priced Over $1 Million

The luxury single-family home segment is sitting at 7.22 months of inventory, and the luxury condo market is sitting at 6.67 months. This is an important indicator as this shows that the ‘luxury market’ (homes priced at $1 million and greater) is officially a buyer’s market.

Overall, 2019 promises to be another strong year for both homebuyers and sellers in the Denver-area. So, rest up this holiday season and get ready for a fresh start come January.

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

April Sees a Spike in Denver’s Inventory of Homes

Small House With Sold Label Attached To ItOften, when taking the pulse of the housing market, we look at the average sales price of a home, the number of homes that have sold, and the active inventory. These are all important metrics when determining the health of the market. Indeed, in April, the average price of a single-family home sold in the Denver metro area soared to a never seen-before record of $543,068, according to a report by the Denver Metro Association of Realtors.

One of the most promising measures of market strength was not the record home price, but the number of homes placed under contract. According to DMAR, 6,097 single-family homes, condominiums, and townhomes were placed under contract last month. That was the best April for under contracts since 2013, when 8,223 homes were placed under contract. Last month was the first April since 2014 that more than 6,000 homes were placed under contract.

One of the best indicator of the sales activity in any given month is how many homes go under contract. Sales, by contrast, measure the number of homes that were placed under contract in previous months. There were 4,384 total sales last month, almost a 9% drop from April 2017. Of course, a certain number of homes placed under will not close. But in Denver, where there is only a 1.24-month supply of unsold single-family homes, some buyers are often able to purchase a home that did not close under its initial deal.

Buyers also had more homes to choose from in April than in March. 6,917 new listings hit the market in April, a 9.12% increase from a year earlier and almost a 5% increase from March. Homes also sold much faster in April than in March. Buyers, on average, snapped up listings after they were on the market for a mere 20 days in April 23% faster than the sales pace in March.

Sellers also did a good job of listing their homes at the appropriate price. The average closing price for a single-family home was slightly above the average listing price, according to DMAR. Overall, homes closed at just under 1% over the listing price. The mix of homes sold likely helped drive up the average price of single-family homes in April.

Once again, the luxury market of homes priced at $1 million or more was the best-performing price strata. A total of 196 luxury single-family homes and condominiums traded hands last month. Which was the best April on record for luxury home sales.  Luxury home sales were up 33.33% from a year earlier. Luxury single-family home sales led the way, with 184 homes closing, a record for an April. That was a whopping 40.46% more than a year earlier. Total sales volume of luxury single-family homes rose to $281.6 million, soaring 41.13% from April 2017.