Colorado Real Estate News

2016 Sets Records for Denver Housing Market

Sales Growth | Denver Housing MarketLast year was one for the record books for the Denver-area housing market. Buyers snapped up $22.23 billion in single-family homes, condos, and townhomes, eclipsing the previous record set in 2015 by almost $2 billion, according to the Denver Metro Association of Realtors. Year-over-year sales were flat, with a total of 55,634 homes trading hands.

At a time when the inflation rate was less than 2 percent, home prices soared. The average price of all homes sold for the entire year was just under $400,000, a 10.06 percent jump from the previous year. The median price of all homes sold sat at $349,900, rising by 11.43 percent.

Both single-family and condo home prices set records. The average price of a single-family home sold at $442,467, booking a 9.07 percent increase from 2015. Meanwhile, the average price of a condo showed an even bigger percentage gain with a 12.1 percent increase. There were only 1,025 active condos and townhomes on the market at the end of December and condos accounted for 24 percent of total active listings.

In total, there were only 4,265 homes available to be purchased at the end of December, the lowest number on record for a December. The extreme shortage of homes led to a mere 1.09 months of inventory, an 8.4 percent drop from a year earlier. For homes priced from $100,000 to just under $500,000, there was less than a month’s inventory available to be purchased. Even for homes priced at $1 million or more, there is only a 7.63-month supply of unsold homes.

So what is in store for 2017? While no one knows for sure, the low supply of homes is likely to continue to put pressure on home prices. At the same time, the higher prices themselves, as well as rising interest rates, are headwinds that could damper sales and home prices this year.

Colorado Real Estate News

November Sees Record Sales Activity in the Denver Area

Maybe it was because a Presidential election like no other was finally over. Maybe it was because mortgage rates were starting to rise and prospective buyers decided to get off the fence and lock-in historically low rates. Maybe it was the great weather. Maybe it was all the above. Whatever the reason, this November was one of the best ever for home sale activity in the Denver area.

REcolorado, formerly called Metrolist, said it was the second-best November ever, topped only by 2004. But in 2004, Denver was still grappling with a foreclosure crisis, and a lot of distressed homes were fueling sales. This year, of course, there are very few, if any, bargain-priced or distressed homes to buy. In fact, the average price of all home sales last month topped $400,000 for the first time in November.

Let’s look at some of the November data reported by REcolorado, the largest MLS in Colorado:

  • The sale of all homes rose by 9.8 percent from November 2015.
  • The average sale price of all homes, at $400,349, rose by 10.3 percent.
  • Single-family home sales did even better, rising 12.97 percent.
  • The average price of a single-family home sold was $437,231, up 9.9 percent.

Another report, by the Denver Metro Association of Realtors, showed similar trends, but an even higher average sales price of $446,631 for a single-family home, an 11.48 percent jump!

At the same time, the housing market is much tighter now than it was a year ago. There was only a 1.47-month supply of unsold homes on the market in November, a 23 percent drop from a year ago, DMAR’s data shows. That means if no new homes were added to the inventory, and the sales pace continued at the current rate, there would be no more homes to buy in about six weeks.

The biggest drop in months of inventory occurred on the luxury end of the scale. There now is only a 7.5-month supply of homes that cost at least $1 million, which is less than half of where the inventory stood for luxury homes a year ago. What that tells us is that while the overall market is still a strong seller’s market, but the luxury market is one very close to being in balance between buyers and sellers.

Colorado Real Estate News

Denver Experiences Low Supply of Homes

Downtown DenverThe two overriding forces shaping this summer’s Denver-area housing market are fewer homes on the market and the highest prices ever seen. There were fewer than 5,500 total homes on the market at the end of May, reports the Denver Metro Association of Realtors. Typically, you would have three times that many homes for sale as the summer market is about to kick off.

The low supply of homes has driven home prices to record levels. For the first time, the average price of all homes sold in the Denver area has topped $400,00, according to REcolorado, the biggest MLS in Colorado. REcolorado puts the average sold home price at $407,662, 9 percent higher than it was a year ago. Given how expensive homes are, some consumers will be priced out of the market, meaning there may be fewer people competing for homes this summer than last summer.

Still, the low supply of homes has also driven down the months of inventory on the market. The entire Denver area housing market only has slightly more than a 5-week supply of unsold homes on the market, according to DMAR. In other words, if no other homes were added to the market and the sales pace remained the same, in less than six weeks all of the inventory would be gone!

As tight as the market is, the lack of inventory is especially severe at the lower and middle end. For homes priced from $100,000 to $399,999, there is less than a four-week supply of unsold homes on the market.

If you move up one price strata to $400,000 – $500,000, it doesn’t get much better with only a 4.2-week supply of unsold resale home for people to buy. And if you are looking for a home priced between $200,000 to $299,999, good luck. There is only a 1.5-week supply available in that price range, where there are far more buyers than homes for sale.

A normal market, where supply and demand are in balance, has about a 5- to 7-month supply of homes. Even for homes in the Denver area priced at $1 million and up, there is only a 7.5-month supply of homes.

If you want to buy a home this summer, speak with a trusted real estate broker to map out a strategy. And if you want to sell, congratulations! Price your home right and your biggest problem will be picking a winner.

Colorado Real Estate News

2016 Marks Historic Event for Denver’s Real Estate Market

The beginning of 2016 has marked a historic event in Denver’s real estate market history. For the first time ever, there are fewer than 4,000 unsold homes on the Denver-area market. The Denver Metro Association of Realtors recently announced there were a mere 3,963 unsold homes at the end of February, an all-time low. This record low comes just as the spring home-selling season kicks off.

These record low numbers also reversed a trend that started last spring of inventory levels slowly climbing on a year-over-year basis. That means this spring, you can expect to see another frenzied market, with buyers bidding up the prices of homes.

Yet, digging deeper, it’s important to realize that the shortage of homes isn’t spread equally across all price ranges. In fact, February ended up with a 7-week supply of unsold homes, compared with a 5.2-week supply in February 2014. That might not seem like much, but it’s a 37.6% difference!

Still, it clearly remains a seller’s market, especially at the lower price points. There is less than a two-week supply of homes priced from $200,000 to just under $300,000, according to DMAR’s data. And only slightly over a two-week inventory of homes priced from $300,000 to $399,999.

In contrast, it’s a bit more of a buyer’s market toward the upper end with a 6.56-month supply of unsold homes priced from $750,000 to $999,999. Last year, there was about a 4-month supply of unsold homes in that price range. Buyers at the $1 million+ price point have more bargaining power with an 11.5-month supply of unsold homes.

Yet, that price range also has seen the biggest percentage drop in supply. The supply for the most expensive homes has dropped 45 percent from a year ago, when there was a 21-month supply of unsold homes at the top of the market.

Still, whatever the price range, one thing is clear. Now is a great time to call a real estate agent to list your home.

 

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.