Predicting how the real estate market will perform is like looking into a crystal ball. So, the best way to forecast how 2019 will fair is by taking a look back at trends from the previous year.
New Year, New Market
Last year truly was split down the middle with two distinct tales. The first half of the year kicked off with the same flurry of homebuyer excitement and activity we have seen in our hot real estate market over the past several years. By June, housing inventory jumped which marked a major milestone moment for Denver-area homebuyers and sellers as the market took a sudden shift. At that time, the adjustment formally commenced and, since, conditions have been moving toward a more balanced market.
Home Sellers are Still in Control, with One Exception
Despite what feels like a major market shift, home sellers in Metro Denver are still in control in all housing price ranges, except homes priced over $1 million where homebuyers and sellers are on equal footing.
The luxury market was record breaking this past year. In 2018, 2,156 homes sold and closed for $1 million or greater – up 18 percent compared to 2017. The closed dollar volume in 2018 in the luxury segment was a record-breaking $3.29 billion, up 18 percent year over year.
Furthermore, the luxury market is kicking off the New Year on a good note. In December, the average days on market for luxury homes dipped slightly to 72 from 74 in November and 110 year over year. Close-price to list-price was up, just shy of two percent from December of 2017.
Surprisingly, Home Prices Continued to Rise
With home sales down and inventory up, it might not make a lot of sense for home prices to be up, but they continued to rise.
In 2018, compared to 2017, the number of home sales was down 5.5 percent and housing inventory was up 44.7 percent by year-end. The average price for a single-family home in 2018 was $522,839, up 8.05 percent in a year. The average price of a condo in increased 9.82 percent, ending 2018 at $351,677. Home prices continued to rise in large part because people continue to move to the Denver area.
Notably, though, with more competition, many home sellers have recently had to make price reductions for the first time in years.
Overall, a more balanced market is a good thing as we are shifting to a bit more normalcy. The Denver-area housing market is still hot, albeit seasonally cool for the time being, and offers exceptional opportunities for homebuyers and sellers alike.