All data taken from REColorado on November 11, 2016 for the 8 county Denver Metro Area.
Has Denver’s Real Estate Market Gotten Very Expensive for the Average Buyer? Yes, here’s why!
• Average Price of both Single Family homes and Condominium homes Year over Year in October was $392.599. We are starting see prices flattening as there was a meteoric rise of 9% increase year over year which is somewhat unsustainable after the 40%+ the previous 4 years.
• Inventory for November 2016 decreased 8% over November 2015. This does show that Denver homeowners are not putting their homes on the market right now. From September 30 to October 31, 2016 the inventory decreased 12%. This is a significant decrease in inventory meaning demand for homes should remain constant through the next several month.
• The number of homes closed in October 2015 was 5,216 compared to 4,674 in October 2016 or a 10% decrease in closings. This signifies the buyer pool is shrinking.
• Days on the Market is 26 days which is about the same as 12 months earlier. However the number of home placed under contract in October 2016 is reducing slightly as well. The indicates the closing of properties will slow down over the next 3 months.
• The median price of a single family home in Denver has risen 12% year over year to $345,000. This is an unsustainable number and prices will slow down moving forward.
• The median price of Condo’s continues to increase with buyers moving to attached homes as prices are better. Current median price of an attached home is $245,000.
The anticipated slowdown of housing sales in the 4th quarter and first quarter of the year is seasonal, however it is also a result of: 1. Individual incomes not keeping pace with the increase in the pricing of homes over the last 48 months in Denver, 2. An inventory of higher priced homes and/or homes not meeting the condition or location demands of today’s buyers and 3. An increase in interest rates that are predicted to be higher moving forward. In fact, as the election ended, rates went up ¼ point this week alone.
What Should Buyers Do in Today’s Market?
• Know the trends of the neighborhood you are considering. Each neighborhood has its own unique characteristics. Know the Data before buying.
• How Long will you live in your Next Home? This is an important question in a market of higher priced homes. If you plan on living in the home 3 years, you want to make sure there is still an upside of value and tax savings for you.
• We are approaching a market where you, as buyers, will be able to include some terms as part of your purchase. Terms far aweigh price in most cases.
What Should Sellers do in Today’s Market?
• Be positioned as the best conditioned home. You will get top dollar this way.
• As you will have less competition, now is the time to really know where to price your home. The best way to continue to attract multiple buyers is by choosing a price position below other sales from the last 90 days. This will cause you to be in a high demand situation vs. sitting on the market with a price that may be too high in the eyes of the buyers.
• It’s November, and although the holidays are upon us, the relatively low inventory should be encouragement alone to place your home on the market now, versus waiting for after the holidays.
