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

The Number of Homes on the Denver Real Estate Market Continue to Rise

Denver Real Estate

There is good news if you are a prospective home buyer in the Denver area. Last month, the market experienced a near 25% increase in the number of homes on the market from April, with an active inventory of 6,437 single-family homes, townhomes and condominiums. While inventory normally rise on a month-to-month basis this time of the year, as the historic strong summer selling season kicks off, this May saw an especially big percentage increase. In May 2017, for example, the market experienced a 9.96% increased from April. Therefore, the percentage increase this May was about 2.5 times greater than a year ago. Year-over-year statistics showed a 9.19% increase in active listings this May, compared to a 7.91% increase in May 2017 from May 2016. Some 7,748 homes hit the market last month. And the number of new listings on the market rose by 12% from April.

Meanwhile, home prices rose only slightly month-over-month in May, but continued a double-digit march upward on a year-over-year basis. The average price of all homes sold in the metro area is approaching $500,000, a milestone already reached for single-family homes. The average price of all homes sold last month was $490,355, less than a 1% increase from April. However, it was a different story for all homes on a year-over-year basis, with prices rising by 11.37%. The average price of a single-family home, meanwhile, was $540,624, largely unchanged from April, but up 10.67% from May 2017. The sales activity also picked up on a month-to-month basis.

The 5,235 sales of all homes marked almost a 6% increase from May and the 6,178 homes placed under contract was about a 5.5% increase from the previous month. The increase in listings was reflected in the months of inventory. There was only a 1.28-month supply of single-family homes on the market in March. As incredibly low as that is, the months-of-inventory for single-family homes was up 8.5% from May 2017.

The good news for first-time home buyers is that on a percentage basis, the months of inventory almost doubled at some price points. But don’t let the large percentage increases fool you, because the numbers are small. For example, there was 1.92-months-of-inventory for homes priced from $100,000 to $199,999 last month, a 97.9% increase from May 2017. Still, there were a mere 23 listings available in that price range last month, so it is easy to imagine price wars for the two dozen homes listed below $200,000. But what is encouraging is that the luxury home market continues to be the strongest in the Denver area on a percentage basis. At the end of May, there was a 4.16-month supply of unsold homes in that price range. That is a 28.6% drop in luxury inventory levels from a year earlier. The luxury market is the only price point that is in equilibrium between buyers and sellers in the Denver area. Despite the increase in inventory levels, the overall housing market in the Denver area remains a strong seller’s market.

A separate report by Kentwood Real Estate showed that 178 single-family luxury homes priced at least $1 million sold last month in the Denver area. That is a 19.5% jump from May 2017. That makes last month the best luxury home market for any May on record. Total dollar volume for luxury, single-family homes soared by 18% to $265 million on a year-over-year basis. Not only were there more luxury home sales, but they sold much faster. The average days on the market for a luxury home was 68 days, a whopping 34% drop from the 103 days it took to sell a luxury single-family home in May 2017, Kentwood reported.