The real estate market is a popular topic. No matter where I go there is always someone who ask, “How’s the Denver real estate market?” Considering most people either own or want to own real estate, it is not surprising they have an interest in discussing it!
My answer to the question is never the same. There are so many aspects of the real estate market, it usually helps to know what if any segment of the market they are referencing. For instance, there might be a extreme shortage of entry level housing where we see these homes selling fast, while in the luxury end of the market the sales are coming much slower at 12-14 months. To respond that we have an average of 41 days on the market to an owner of a $3,500,000 home would give a false impression!
A market by definition is where “the forces of demand and supply operate.” Demand and supply fluctuates both seasonally and economically. We see a variable between the city, suburbs and country. Our market is effected by the availability of money and the interest rate. It is not uncommon to experience a slow market during a time when consumers lack confidence in jobs, political policies and general apathy.
Scarcity also drives the real estate market. Currently we have a “low inventory” of homes for sale. Denver and Colorado are experiencing a huge influx of people relocating here from around the globe. We have a wonderful quality of life, with low crime, good weather and that amazing backdrop of the Rocky Mountains to look at each day! People find Metro Denver very attractive and want to live here too. The influx compounded with the shortage of housing for sale, the prices are getting driven up. During times of shortage it is common to see:
If you are a seller asking how the market is, what is your reason for asking? If you are concerned about selling when the market is low, it probably doesn’t really matter. Why? Well if you are selling low and buying low it is a wash. The same wash holds true for a seller wanting to sell high. Unless you are leaving the area, you will be buying high too. So once again it is a wash.
Many people worry about the Housing Bubble. This is a temporary condition caused by unjustified speculation in the housing market that leads to a rapid increase in real estate prices. As with most economic bubbles, it eventually bursts, resulting in a quick decline in prices.
The key words here are “unjustified speculation.” We currently have justified speculation, Denver real estate prices are increasing because we have people wanting to buy houses here. If people stop moving here, and we continue to build and list homes for sale at a rapid pace without adjusting to the slowdown, than we will see a decline in values because of the decline in demand.
There are many tools available for you a home owner to track what is happening in the real estate market. My company publishes monthly statistics that compare real estate sales from month to month and to the previous year. These statistics will also show the “days on market” between this year and last. Following these stats will give you a general idea of where the market is going.
NOTE: don’t place much concern from month to month averages. You need to consider several months as a trend. We experience both seasonal ebbs and flows, plus some months more or less expensive homes get sold, skewing the stats artificially (temporarily).
Additionally, this website offers for free a monthly Market Report. You can customize your Market Report to reflect your neighborhood. Once registered you configure the report to show you all the homes for sale, sold and pending. It’s a great way to keep up with your local real estate market.
What is your home worth in today's real estate market? Call 303-589-2022 or Click to email now.
It’s a fact! 100% of the people I know sell their homes when their life changes. Downsizing, upsizing, right sizing are a few of the reasons. Home owners sell because the house no longer works for the size of the family, the budget, or it no longer fits for the amount of “stuff” they own. Perhaps the schools are no longer important since the kids that are gone, or there are more appropriate schools for their needs in a different part of town, state, country.
If you live in Metro Denver, the good news is the real estate market has been a seller’s market for several years now. A seller’s market is one in which the seller is favored in the transaction. This means there are more buyers for homes in Denver then there are homes available. Buyers are willing to pay more in a seller’s market as opposed to a buyer’s market when homes are readily available and they can negotiate prices down.
Denver region homeowners are enjoying having equity in their homes. The equity is being used to fund a new home purchase, pay off debt, pad retirement incomes and even acquire rental properties or kiddie condos!
Up, Down or Right Sizing happens when your home just is too big or small for you. Growing families tend to expand in size proportionate to the amount of toys they own. Eventually in the natural cycle of life, this expansion starts to contract as the kiddos head off to begin lives of their own. Right-sizing occurs when older adults decide the two-story stairs are getting harder and harder to negotiate and make a one-story home look might good to the worn out knees!
Interest rates have been historically low for years now. We keep being told they are going to go up and they will, we just don’t know when. When they do go up the “affordability” will go down. That means you will either get to pay more for a new house or buy less of a house. Either way the inevitable rise in interest rates will effect you. So buying when the rates are low will be a wise decision that you won’t regret in the future.
The answer of this is entirely up to you. Is your home working for you in size, location, budget, family situation? Are you living in the area you want to live? Are you thinking/planning for the future? Have you come to terms with the reality of staying where you are vs the reality of where you should really be living?
The answer to this question is about you and your situation. Thoughtful planning ahead is much wiser than having to rush into a sale that is forced and hurried. Getting the answers to your questions will help you prepare and make a good decision, one you won’t regret.
If you would like to track the home sales prices in your neighborhood, use our handy automated “Market Report.” You can create a free personalized report that will be sent to you each month. Follow this link: http://www.theberkshiregroup.com/search/market_report_search/
If you are thinking of selling now or in the near future and would like to know what your home might sell for in the Metro Denver real estate market, call us.
1. Of the 13,173 homes shown as sold by REColorado, 2204 (or 16.7%) were cash sales.
2. 2017 March sales exceed 2016 March sales by 625 units.
3. Inventory has increased by 18.79 % over last March, but we have only 6 weeks of inventory. A balanced market would be 20+ weeks of inventory.
4. Under contracts for March exceed last March by 705.
5. The median income ($68,436) in Metro Denver is not sufficient to buy the median priced home in the market with less than 20% down. 10% down requires an income of $80,712. This data from HSH.com also shows Metro Denver to be the 8thpricies market in the country, and the most expensive not on a coast.
6. A few things from the graph below:
A. Days on Market (DOM) for properties valued below $300K have changed very little on the first quarter for the past 3 years. First time buyers are still in a very competitive market.
B. DOM for the $300K to $750 K market has dropped steadily for the past 3 years.
C. The Price point is moving up, as indicated by the median sold price now at $399,000 for single family homes.
Way back in 2009 when the bottom had dropped out of the housing market, the media was all over the “housing crises”. Of course, the media never seemed to understand the real story, which was Americans were suffering a “financial crises”. Having mostly recovered from that crisis, we are now, at least in much of America, experiencing a “housing crises”. Meaning, not enough houses available to purchase, at least in certain price ranges. So, first to why, then, a few solutions.
The why is multifaceted, as most such societal events seem to be. First, many home owners have no pressing desire to sell, as they have refinanced into great 4% or less loans over the past 3-4 years. If your low payment mortgage is attached to a house that serves your needs well, there is no good reason to endure the cost and hassle of moving. Second, at least in Metro Denver, is a severe shortage of desirable inventory. Even if you want a larger, smaller, or better located residence, the shortage of inventory and the competitive market is discouraging. Third, while the economy is better than 5 years ago, it still seems somewhat shaky, and the lingering memories of the worst economy since the 1930’s does not easily fade from memory. Fourth, again somewhat unique to Metro Denver, is the current construction defects law, which has most multi-family builders avoiding the condo market, long the base level for home ownership. Fifth, there is considerable mis-information regarding the mortgage market floating around that has many sellers sitting on the fence. Sixth, while production home builders are certainly back in the market, large acreages suitable for those types of builders are located far from the city center, and in-fill projects tend to be very high priced.
So, what are the fixes? For home owners that are relocating out of the area, most markets are not as super-heated as Metro Denver, so there is a good chance you can sell your Denver area home quickly and do well going most anyplace else. If your need is to up or down size, and you don’t relish living in a tent for 3 or 4 months, there are a few options. First, sell with a delayed closing. Knowing you have 60 to 90 days to find a replacement home takes the pressure off & works well in most cases. A second choice is to rent back after closing, say 60 to 120 days. Both of these solutions makes a door-to-door move more likely, and lessons the emotional stress.
If you want to buy a new home, most builders are talking 6-12 months from contract to build, allowing you plenty of time to get your home sold, most likely with a rent back and a good chance of a door-to-door move.
Of course, all of these solutions require considerable coordination and preparatory work. Buyers MUST meet with their preferred lender and obtain the latest in gilt edged loan pre-approval letters. Before placing your house on the market, a thorough understanding of the desired replacement market is a necessity. Your trusted Berkshire Group REALTOR can help you prepare a winning game plan to achieve the exact result you want, but 1 to 2 months lead time is in your best interest. By working together, we can prevent you from having a “housing crises”.
With properties priced below $200K representing only 7% of the market, the heart of the Denver area market is reflective of the median at approximately $35,000.
Every Zip code area in the 7 county Metro Denver market is a sellers market, in some area there is less than a weeks supply of homes available.