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So How’s the Market – June 2016

Posted by Tim Hoyman on June 29, 2016
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Has Denver’s Real Estate Market On its way to Normalcy?

  • Average Price of both Single Family homes and Condominium homes Year over Year in May has increased to $407,662 a 9% increase.
  • Inventory for May 2016 decreased by 5% year over year. When supply goes down prices go…….  However, inventory is starting to rise as the number of new listings taken for single family homes and condo’s was 7372 a slight increase from a year ago.
  • The Average Sold Price of a Single Family home in May increased 3% in one month from April to $448,804.
  • Days on the Market to Sell a Home increased by 14% from May of 2015.
  • The average price of a condominium is $297,930 an increase of 14% since last May.
  • We are on a pace to sell 58,002 homes and condo’s in Denver for 2016. With 7149 total homes and condo’s on the market that is a 1.47 month supply of homes for the 8 county metro area. A 6 month supply would suggest an equal number of buyers and sellers.

What does the future look like for Denver Real Estate?

Three Factors to Watch for the balance of 2016:

  1. Interest rates for mortgages remain at low levels. The Federal Reserve, FNMA, NAR and most economist would suggest rates will rise the balance of the year to upper approximately 4.75% to 5%.   This will diminish the buying power of buyers to continue the bidding wars on lower priced homes and will create more inventory.  However, we encourage buyers to buy know, as interest rates rise, your buyer power decreases by 10% with every 1% on interest rate gain.  Buying now is still your best bet in a low inventory market.
    1. Inventory will begin to rise in Denver.
      1. As prices have hit an all-time high and individual incomes have not kept pace, buyers are becoming more selective and slowing their pace of purchase.
      2. The lack of inventory has kept some sellers from entering the market. With more choices, sellers wanting to move will add their home to the inventory mix feeling more secure in finding a replacement home.
  • Denver continues to be a destination for relocating families and they does not appear to being slowing down for the next 6-12 months.
  1. Employment growth and stability in the overall economy bodes well for Denver housing to continue.
  2. Rental Rates will continue to rise causing a continued housing shortage.

Today’s market offers a very unique opportunity in that the price ranges of homes below $500,000, as these properties are rising in price rapidly and homes in selected suburban homes priced above $1 million are not rising at the same pace or at all.  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 June, make your home front sparkle from the street to attract the most traffic as best you can.

Call Tim for more information!

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