All data taken from REColorado on November 14, 2017 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 single-family homes and condominium homes year over year in October was $438,731. We are starting to see prices flattening as there was a meteoric rise of 10.6% increase year over year, which is somewhat unsustainable after the 40%+ the previous 4 years.
- Inventory for November 2017 decreased 10.2% over November 2016. This does show that Denver homeowners are not putting their homes on the market right now. This is a significant decrease in inventory, meaning that demand for homes should remain constant through the next several months.
- The number of homes closed in October 2017 was 4,119 compared to 4,600 in October 2016, or a 10.5% decrease in closings. This signifies that 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 homes placed under contract in October 2017 is increasing slightly, as well.
- The median price of a single-family home in Denver has risen 8.7% year over year to $378,250. This is an unsustainable number and prices will slow down moving forward.
The anticipated slowdown of housing sales in the 4th quarter and 1st quarter of the year is seasonal, however it is also a result of:
- Individual incomes not keeping pace with the increase in the pricing of homes over the last 48 months in Denver,
- An inventory of higher priced homes and/or homes not meeting the condition or location demands of today’s buyers, and
- An increase in interest rates that are predicted to be higher moving forward.
What Should Buyers Do in Today’s Market?
- Know the trends of the neighborhood you are considering. Each neighborhood has its own unique characteristics, so examine 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 for 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 outweigh 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 current sales from the last 90 days.
- 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.