Colorado Real Estate News

Denver Real Estate Midyear Update

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Denver Real Estate Midyear Update: More Conditions Favoring Buyers Creating Balance

With metro-Denver housing inventory at its highest level since October 2013 and interest rates still low, now is a good time for home-buyers. On the flip side, with home prices peaking now is also a good time for home sellers; making for a more balanced market.

Housing Inventory

Housing inventory is up 28 percent year to date from 2018. The first half of this year ended with the most active listings, at 9,520 at the end of June, since October of 2013 which was at 9,734. For perspective, the record-high June for active listings was in 2006 with 31,900, and the record-low was in 2015 with 6,197.

Year to date in the Luxury Market (homes priced $1 million+), single-family home sales were down 2.72 percent year over year, but up 34.05 percent compared to 2017. Luxury condos also saw striking results with sales up year to date at 38.78 percent year over year and 4.26 percent since 2017.

Home Prices

The average sold price dipped 0.54 percent from May’s $502,518 to $499,807 at the end of June, but it crept up 1.64 percent year to date. More choices for home-buyers means sellers have had to make price adjustments to be competitive. Sellers with homes priced between $1,500,000 and $1,750,000 have been taking the biggest cut with a 91.20 percent sale-to-original-price ratio for single-family homes and 94.9 percent for condos.

Days on Market

Homes have been staying on the market longer before going under contract this year. The median days on market was up 66.67 percent from six days at this point last year to 10 so far in 2019. The average days on market is up 25 percent year to date compared to last year, from 24 to 30 days. Meanwhile, days on market for all price ranges indicates a seller’s market except over $1 million+ where it’s an equal market between buyers and sellers with 5.16 percent months of inventory for single-family homes.

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

Inventory Hits Record Low In October

The most frightening part of October could have quite possibly been the lack of inventory. The Denver Metro Association of Realtors reported a mere 6,312 actively listed single-family homes and condos on the market last month, an all-time low for an October. The active inventory was down 16.79% from September. While there is always a month-to-month drop this time of the year, last month marked a 49% larger percentage drop from September to October than in 2016.

On a year-over-year basis, the active inventory fell 6.22%, which was more in line with the 5.94% drop experienced during the same period last year. Fewer new listings hit the market last month, too. The 4,724 new listings marked a 19.2% drop from the 5,847 added to the market in September and a 3% drop from the number of new listings a year earlier.

The lack of inventory is not only frustrating for buyers, but it also is pushing up the prices of homes. The average price of all homes sold last month was $443,873, a 3.9% increase from September and an 11.85% jump from October 2016, according to DMAR. One good piece of news, however, is that the 5,411 homes placed under contract last month represented a 9.5% increase from September and a 9.9% increase from October 2016. The 4,450 sales, though, were down 9.75% and 7.9%, respectively, from September and a year earlier.

With so few homes on the market, it was not surprising that the months of inventory dropped. October ended with only 1.49-months of inventory, which is slightly less than 6.5 weeks. That is a 12.35% drop from the MOI in October 2016. The market was especially tight in the price band from $200,000 to just under $400,000, with less than a month’s supply available in October. The months of inventory, as it always is, was highest for homes priced at $1 million or more. There is a 6-month supply of homes in that price range, which is a 38.4% drop in the months of inventory in that category a year ago.

Interestingly, the luxury market is the one that arguably is the most balanced between buyers and sellers. Luxury homes, in fact, set a record for sales in an October last month. There were 158 homes priced at more than $1 million that traded hands last month, a 49% year-over-year jump and a 32.8% increase from September, DMAR’s statistics show. As we head into the holiday season, which will likely bring the normal, seasonal slowdown, the Denver market remains a strong seller’s market.