About the Denver Real Estate Market
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!
So no, one size does not fit all when discussing the real estate market.
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:
- Offers over asking (list) price
- multiple bids on homes for sale
- escalation clauses (buyer pays $2500 over highest bid up to $xxx,xxx)
- appraisal gap guarantees
- waiving of inspections.
- All this done so the seller will accept the bidder’s offer.
Why do you ask about the Denver Real Estate Market?
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.
How does one track the Denver Real Estate Market?
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.
- Check Number of sales current year vs last month
- Check Days on Market for current year vs last month
- Check Average price for current year vs last month and last year
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.