Metro Denver Market Insights
for the month of August 2015
Name a popular summer activity you enjoy. You’ll be glad to know that Colorado is the place of opportunity to indulge them all. Camping, hiking, fishing, rock climbing, biking – or more sedentary sports like lying about soaking up the sun’s rays. How about 18 holes of golf? If you are looking for adventure you’ll find what you seek in Colorado!
Speaking of golf, did you know there’s a sweet urban legend that it was golf wives who came up with the idea of building their homes right on the golf course in an effort to bring their husbands home for dinner? In fact, in spite of the decline of enthusiasts for the game itself and the mass closing of many courses, Colorado is one of the first states to offer a mulligan to courses in the form of off season activities like cross-country skiing. (mulligan: a golf term for “do over”).
Anyone who has tried to sell a home at some time in the last three years may discover this is the perfect time for their mulligan. The market has about 17% less inventory than 2014. Forecasts indicate an upsurge in first time home buyers. Pending sales are strong, up a little over 8% from this time last year.
Denver welcomed 1,395 new home owners of sold and closed homes in the month of July while continued tight inventory levels appear to be driving the increasingly short days on market for most homes.
On average homes placed on the market saw offers within 24 days compared to 27 days in July 2014. Single family home sales are outpacing multi and condo sales by a good margin. These are great numbers when you take into consideration there were 2,248 active listings in July 2014, and just 1,904 new active listings this July.
Median prices averaged at $321,200 for July, just under 1% higher than this time last year. Nationally, home prices were up 17% year-to-date, so you can safely conclude that despite some less than stellar month-to-month stats, there is solid evidence of the reality of a true market rebound.
All indications so far point to a seller’s market with no reason not to trust that it will extend through the summer and well into the fall season. One chief economist at a major economic research consultancy notes, “there is no evidence of a fundamental shift in home ownership aspirations.” Here’s what the terms mean and how they affect interpreting the market:
SELLER’S MARKET: Low inventory levels, such as we are now experiencing with less than a projected 6 month supply of available homes for sale, means home prices will be trending upward. This is because the demand is greater than the supply so pricing moves to premium levels of appreciation.
BUYER’S MARKET: When inventory levels are about a 7-9 month supply, prices tend to flatten out with possible depreciation occurring.
NORMAL MARKET: Available inventory is about 6 months with home prices appreciating according to current inflation rates.
Mortgage rates slid ever so slightly up last month but national averages are slightly down, with rates remaining well under the 5% mark. These are all fine indications of a real estate market trending upward to stable growth.