So, How’s the Market, July 11, 2015
All data taken from REColorado on July 11, 2015 for the 8 county Denver Metro Area.
Has Denver’s Aggressive Real Estate Market Hit Its Peak in June 2015?
Yes, here’s why!
- Average Price of both Single Family homes and Condominium homes Year over Year in June $373,905. We are starting see prices flattening as there was no change in price from May to June.
- Inventory for June 2015 increased 9% over May. This means the pace of sale will start to slow down as buyer have more choices.
- The number of homes Under Contract in May was 9585 and in June 2015 dropped to 7730, a 19.5% decrease in the number of properties placed under contract. This is the future pipeline of closings to occur. Since this is the first significant drop in homes placed under contract the market will continue to see some briskness, but not like the last 12 months.
- Days on the Market to Sell a Home remains the same from the previous month, but in our opinion will start to rise.
- The median price of a single family home in Denver has risen 14% year over year to $325,000. 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 $218,250.
What The Denver 100 Predicts for the Balance of 2015!
Three Facts to Watch for the balance of 2015:
- Inventory of Homes will start to rise at more seasonal trends moving forward, meaning buyers will slow their buying activity down as they will have more choices of homes to choose from within the Denver market. Still an excellent time to buy a home with interest rates at historically low numbers.
- Pricing appreciation will slow to more moderate numbers. The question of a bubble comes up when housing sales starts to slow. That will not be the future for Denver Real Estate as there are three reasons the housing market will remain a good financial investment for the future.
- Employment within the Colorado market place is very solid and incomes are rising.
- Even though prices have gone up 42% in the last 5 years, Denver is still economically priced compared to the larger cities on the west coast where a buyer pool comes from to Denver.
- Building costs including the acquisition of water rights will continue to increase causing new housing to be more expensive.
- Sellers will be more aggressive in the terms they are willing to offer as many homeowners now have an equity position to enjoy.
We continue to see the Denver real estate housing market to be a very strong viable purchase for the coming years. However, a more sustainable level of appreciation at 3% is a more likely forecast for future years than the 8-10% that has occurred. The balance of 2015 will still see some pretty good appreciation of homes as the inventory, although rising, still is not at a level that the buyer pool can just walk away and go buy something else quite yet.
In addition, relocation to the Colorado market will be a large housing factor from 2015-2025. The job growth projected in the entire Colorado Region for the next decade will outperform the national average creating a trend of stability.
Denver is an awesome place to live. People are making their way to our state to create a new life in Colorado. We have an entrepreneurial spirit within the region that attracts and keeps really talented people within the borders of Colorado. This exciting movement helps economies grow.
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 growing inventory marketplace. 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 more 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 July, make your exterior sparkle and trim the trees with our very wet spring season causing everything to grow beyond normal limits.