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So, How’s the Market, November 19, 2015

Posted by Marla Roth-Fisch on November 23, 2015
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All data taken from REColorado on November 18, 2015 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 $361,867. We are starting see prices flattening as there was a meteoric rise of 12% increase year over year which is somewhat unsustainable.
  • Inventory for November 2015 increased 7% over October 2014. This means the pace of sales will start to slow down as buyer have more choices.
  • The number of homes closed in October 2014 was 4,644 compared to 5,136 in October 2015 or a 10% decrease in closings.
  • Days on the Market to Sell a Home rose 13% from the previous month and in our opinion will rise from the current 27 average days to contracting.
  • The median price of a single family home in Denver has risen 14% year over year to $343,000. 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 $214,500.

 

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 36 months in Denver, 2.  An increased inventory and 3.  An increase in interest rates that are predicted moving forward.

 

Here’s how Denver fares against other cities prices and average incomes to qualify for a home in each market from a chart provided by HSH.com.   Clearly Denver is one of the more expensive housing markets in America because there has not been an entry level priced product enter the marketplace for quite some time.   This lack of entry level homes, such as the lack of condominiums being constructed, has pushed the buyers to higher levels or to renting.

 

Cities 30-Year Fixed Mortgage Rate % Change from 2Q15 Median Home Price % Change from 2Q15 Monthly Payment (PITI) Salary Needed
National 4.08% 0.23% $229,000 -0.22 $1,223.15 $52,420.76
Pittsburgh 3.96% 0.21% $143,000 +2.88 $787.01 $33,729.07
Cleveland 4.08% 0.26% $132,000 +1.77 $802.72 $34,402.31
Cincinnati 4.11% 0.25% $150,300 -1.05 $851.28 $36,483.38
St Louis 4.05% 0.23% $160,000 +1.85 $877.43 $37,603.97
Detroit 4.12% 0.20% $156,317 +2.27 $894.43 $38,332.76
Atlanta 4.10% 0.26% $178,900 -1.43 $919.17 $39,393.11
Tampa 4.19% 0.28% $175,000 +0.00 $980.25 $42,010.79
Phoenix 4.09% 0.27% $218,800 +0.41 $1,022.86 $43,836.81
Orlando 4.11% 0.25% $201,200 +1.62 $1,103.73 $47,302.80
San Antonio 4.09% 0.16% $199,300 -0.05 $1,130.99 $48,470.87
Minneapolis 4.07% 0.24% $228,700 -0.22 $1,199.01 $51,386.23
Dallas 4.09% 0.24% $210,000 -2.42 $1,227.30 $52,598.53
Houston 4.09% 0.22% $217,200 -1.76 $1,252.89 $53,695.27
Philadelphia 4.06% 0.18% $234,700 +1.29 $1,291.24 $55,338.66
Baltimore 4.01% 0.19% $252,300 -0.86 $1,308.63 $56,083.99
Chicago 4.08% 0.19% $229,300 -0.52 $1,432.02 $61,372.12
Sacramento 4.13% 0.17% $291,400 +0.14 $1,450.45 $62,162.20
Miami 4.14% 0.27% $290,000 +0.03 $1,495.95 $64,112.23
Portland 4.13% 0.26% $319,300 +1.43 $1,551.84 $66,507.55
Denver 4.13% 0.25% $353,000 -2.73 $1,608.02 $68,915.21
Seattle 4.18% 0.23% $386,300 +0.26 $1,849.95 $79,283.37
Washington 4.07% 0.29% $388,600 -3.76 $1,910.39 $81,873.73
New York City 4.06% 0.16% $410,500 +0.02 $2,134.94 $91,497.39
Boston 4.03% 0.23% $449,000 +8.30 $2,165.26 $92,796.90
Los Angeles 4.06% 0.23% $506,800 +13.84 $2,322.31 $99,527.51
San Diego 4.11% 0.24% $554,400 +1.20 $2,489.57 $106,695.94
San Francisco 3.98% 0.10% $809,400 -1.36 $3,573.55 $153,152.08

 

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 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.

 

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