Aurora Market Insights
for the month of June 2015
Sometimes no change can be a good thing – stability, the known. From a real estate perspective no change can be a good thing depending on which side of the fence you are standing on. For those sellers who survived the 2005 to 2011 decline in home values, bank foreclosures and short sales, the sun emerged in 2012. The Aurora real estate market steadied itself. Inventory levels for available properties began to diminish as buyers once again became a viable part of the market. As inventory shrank, home values increased.
It took a few years for the area real estate market to climb out of the hole it found itself in, but once it did it seemed like overnight scarcity replaced abundance. Average days on the market for single family home listings in Aurora dropped from 102 days in 2011 to 32 days in 2014. Gloom and doom for home sellers became brightness and promise.
What about those poor buyers who were caught in this quickly escalating real estate market? For them, the good thing about no change was long term mortgage interest rates dropped to historic lows during this period of regeneration and stayed there. In 2007, when the real estate market was still spiraling down, the traditional thirty year fixed rate mortgage averaged 6.34%. In 2014 that same mortgage averaged 4.17%. At this writing, the rate is 3.84%.
Here’s a little simple math. In 2007, the average sales value of a single family home across the Aurora market was $222,821. Assuming an 80% LTV at 6.34%, the monthly principle and interest payment would have been $1,116.17. In 2014, the average sales value of single family home across the Aurora market was $271,638. Again, assuming an 80% LTV at 4.17%, the monthly principle and interest payment would have been $1,058.88. The saving grace for buyers was stable mortgage interest rates.
After a chaotic rebound from the dog years of real estate there appears to be some semblance of normalcy with the Aurora real estate market. Through May/2014 there were 2,655 residential property sales (1,866 single family homes & 789 attached units). Through May/2015 the number was 2,792 (1,788 single family homes & 1,004 attached units). That’s an increase of slightly over 5.10% in the total number of residential property sales.
Available inventory continues to be an issue, but should slowly creep up through the summer months. There were 357 active single family home listings in Aurora at the end of May. That number was 404 at the end of April, resulting in a decline of 11.64% month over month.
Real estate markets on the path to recovery are a bottom up phenomenon, where lower priced properties fuel the fi re initially. As the intensity of the market spreads, higher priced properties begin to feel the heat from the flame and sales increase. We’ve been experiencing that over the past six months as homes priced over a million dollars across the Metro area, mountain communities, and Northern Colorado have begun to sell more quickly.
Change is inevitable. Tomorrow will be different than today. It’s a fact of life, but within change there is also the opportunity for balance. One day at a time is the old saying about how to live your life. The Aurora real estate market appears to be taking that to heart as dramatic shifts in the market aren’t the norm these days.