Denver Metro real estate has been appreciating more than 10% per year for the last 5 years in a row!
Below is a breakdown of the past 40 years thanks to FHFA and Focus1st.
With the home inventory at all time lows our team is constantly monitoring the listing activity in the local MLS – REcolorado, and some interesting observations can be made on reviewing the data over this past week.
This first graph takes a look at how new listing numbers (homes just placed on the market for the first time) compare with price reductions and failed sale attempts (withdrawn & expired listings) over the last 7 days.
The standouts from this chart —
- Only 1,122 new listings came on the market.
- Relative to the number of new listings, about 14% of that number reduced their price.
- 261 listings were taken off the market because they failed to sell (roughly 1/4 the number of new listings)!
The listings that are priced well are moving very quickly and often choosing between multiple offers, but the impact of this lessens as price increases.
Once a listing goes under contract as it will either successfully close or go back on the market for some reason.
The data here shows that relative to the Sold listing numbers roughly 7 out of 8 are successfully closing which leaves 1 out of 8 coming back on the market.
We’ve seen this number fluctuate over the last 6 months, with the current numbers actually on the lower end. This could be due to the fact that we are near month end, but some would still find it surprising given the low inventory market we find ourselves in.
Properly positioning a property within the market not only with the right price, but also an effective marketing plan and the benefits of the Windermere Certified Listing program have lowered our price reductions and expiration rate to nearly zero, while still maximizing the bottom-line return for our sellers. To learn more, connect with one of the amazing Brokers on our team!
Are we in a housing bubble? Is there a recession coming?
Learn the answers to those questions plus more at this fun, interactive, informative presentation full of valuable takeaways featuring Windermere Real Estate’s Chief Economist Matthew Gardner. Hear hyper-local stats and facts as well as national information about the real estate, employment and financial markets.
Reception to follow! Please stay after the presentation and join us for complimentary hors d’oeuvres and drinks.
We hope to see you there! Please click the image below to register:
Colorado added 62,000 new jobs over the past 12 months, an increase of 2.4% over this time last year. All of the metropolitan markets included in this report saw annual employment growth, with substantial growth in Boulder (4.7%) and Fort Collins (+4.1%), and more modest growth in Grand Junction (0.3%). In May, the unemployment rate in the state was 2.3%, matching the prior month and down 3.4% from a year ago. The lowest unemployment rate was in Fort Collins at just 2.0%. The highest rate was in Grand Junction, though it was still a relatively low 3.3%. It is reasonable to expect these markets will see above-average wage growth given the tight labor market.
HOME SALES ACTIVITY
- There were 17,581 home sales during the first quarter of 2017, a solid annual increase of 3.9% over the first quarter of 2016.
- Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 9.4% increase. There was also an impressive increase in Douglas County (+6.3%). More modest sales growth was seen in Denver and Weld Counties.
- Even with the rise in sales, listing activity is still running at well below historic averages, with the total number of homes for sale in the second quarter 7.6% below a year ago.
- Sales growth continues to trend higher, but inventory levels remain well below where they need to be to satisfy demand.
- Due to solid demand, home prices continue to rise with average prices up by 8.5% year-over-year to an average across the region of $438,980.
- Boulder County saw slower appreciation in home values, but the trend is still positive.
- Appreciation was strongest in Denver and Weld Counties, where prices rose by 12.4% and 10.6% respectively.
- Economic growth is driving job growth, which is driving housing demand. Given the relative shortage of homes for sale, expect to see home prices continue to appreciate at above-average rates at least through the rest of the year.
DAYS ON MARKET
- The average number of days it took to sell a home dropped by three days when compared to the second quarter of 2016.
- Homes in all counties contained in this report took less than a month to sell. Adams County stood out as it took an average of only 11 days to sell a home.
- During the second quarter, it took an average of just 17 days to sell a home. This is down by a substantial 13 days compared to the first quarter of this year.
- The takeaway here is that demand remains robust as evidenced by the remarkably short amount of time that it is taking to sell a home.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, home sales, interest rates, and larger economic factors.
After the second quarter of 2017, I have moved the needle even farther in favor of sellers. Mortgage rates remain very competitive and, with the specter of lending standards easing a little, demand will remain robust, which will be reflected in rising home values.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.