All data taken from REColorado on February 16, 2018 for the 8 county Denver Metro Area.
How Hot is Denver Real Estate?
- February 2018 data is reflecting the normalization of the Denver real estate market even with some of the lowest inventory of single family and condo recorded for the last 25 years. Total active listings today is reporting 3508 listings compared to 3659 listings twelve months ago; a slight decrease and continuing to remain low – a bonus for sellers.
- The number of closed properties for January 2018 has decreased year over year with 2749 single family and condo homes closed; a significant 11.4% decrease year over year.
- The number of homes under contract month over month has increased 7.2%. This is a more normal seasonal increase vs. the past 4 years. Why is this flattening of the market occurring? Higher prices, coupled with higher interest rates and a smaller buyer pool is creating a market moving toward an equilibrium for buyers and sellers.
- The average price of a home today is $442,387 compared to $399,193 one year ago – an 10.8% increase.
- The days on the market has remained constant over one year ago and today stands at 33 days on the market.
Can The Aggressive Sellers’ Market Continue through 2018?
Three Factors to Watch in 2018:
- Interest rates for mortgages remain at historically low levels but have increased from this time in 2017. The Federal Reserve has slowly been increasing the fed rates and they will continue their policy of lower rates for the short term, but not necessarily through the end of the year. This will allow buyers to continue to have a buying power this spring. However, with some future uncertainty, their buyer behavior could change to “a wait and see approach” vs. “a bid higher mentality”, causing inventory to continue to rise and sales to slow down through the spring/summer season.
- Obtaining a loan is becoming easier for buyers with alternative lower down payment type loans available in the marketplace that were not available 24 months ago. This will continue the stream of buyers into the market, continuing a sellers’ market.
- Employment growth and stability in the overall economy bodes well for Denver housing to continue at the same pace for at least 4-6 months. Sellers will have the upper hand in the lower price ranges with inventory levels below 1 months of supply.
Overall the market will decrease in units closed from 2017 and January will start a trend of lower year over year sales through 2018. Today’s market offers a very unique opportunity in that the lower price homes below $750,000 are rising in price and homes in selected suburban homes priced above $1 million are not rising at the same pace. The buyer in the luxury market can really get a great value by purchasing in the next 90 to 180 days. This window will close as inventory in the luxury market continues to decrease.
What Should Buyers Do in Today’s Market?
- Be Ready To Buy! Homes below $500,000 are moving quickly.
- Know you will not have much room for negotiations during inspections; understand the condition of your new purchase very well.
- Real estate is a very localized product to neighborhoods. Study the data from the area you want to live and compare the research for that neighborhood over time to understand the trends.
What Should Sellers do in Today’s Market?
- Be positioned as the best conditioned home; you will get top dollar this way.
- Appraisals haven’t yet caught up with the buyer willingness to pay higher than list prices. Have a strong strategy to get your home appraised before taking it off the market on the highest offer.
- It’s February: make your home front sparkle from the street to attract the most traffic as best you can.