Falling interest rates. Lower inventory. Higher sales volume. How much higher can prices go?
We’ve been reading again and again in the news about falling interest rates. Then, it finally happened: rates rose for the first time since October 2018. Does this mean interest rates are finally becoming stagnant? While the 30-year mortgage rate is down nearly 1% from last October, a small increase from September is notable. The increase can be partially attributed to a rising stock market and hints of a deal in the China trade war.
Denver home inventory was down 4.5% from last October while homes sales were up 9.4% for the same time periods. This equation has the potential to push prices higher during a season that typically sees steady to modest price increases. If you’re anticipating a deal during the winter season, keep an eye on interest rates. If they keep rising, you may see panicked buyers making rushed decisions in order to lock in a great interest rate.
Source: Aldo Svaldi of the Denver Post
If you were to search “overpricing a home” on Google, you’d find pages upon pages of articles and blog posts advising that it’s a bad idea. A year ago, one could get away with overpricing a home since putting it on the market alone would garner positive attention. Today, things have changed. Highlighting his reasoning with real time Denver market statistics, this article’s author advises slightly under-pricing a home when listing it these days. Agents and buyers not only know what the home is worth; they also know that a listing price must accurately represent the home’s worth in order to see a quick sale.
Source: Aldo Svaldi of the Denver Post
While Colorado leads the country in some areas (like housing prices), the birth rate isn’t one of them. While the national birth rate is hovering around 1.8 births per woman, Colorado women are falling behind at 1.7. Why does this matter? To keep the population stable (and prevent things like labor shortages in the future), the birth rate needs to be closer to 2.1 births per woman. Colorado ladies, if you’re on the fence about adding another little one to your brood, here’s a reason for the “just do it” column.
Source: Cushman & Wakefield
It’s official: Denver is cool. We already knew this, but now we have a report to back it up. While other cities have one or two “cool streets”, this report has dubbed the entire downtown Denver area as one big “cool street.” We have our creative employment, tech-driven market, and urban revitalization to thank for this! Here are a few details on two of the featured Denver “cool street” areas:
The Highland neighborhood is chock full of cool streets. While it’s one of Denver’s oldest neighborhoods, it’s been an area of recent (and many) revitalizations.
RiNo Arts District
The RiNo Arts District was once an industrial neighborhood. As creatives have flocked to the area, it has transformed from warehouses and factories to breweries, galleries, and restaurants as far as the eye can see. The district spreads into three neighborhoods; all which are seeing major transformations and growth.
Download the free report to see what other Denver hoods were featured!
It’s the time of year again where we talk about seasonal adjustments to the Denver housing market. If you’ve been paying attention to our monthly stats updates you might have an idea of where this is heading. Lets dive in…
MEDIAN SALE PRICE
Denver’s single family median sales price hit a record high in June peaking at $518,750. At first glance, you’re probably thinking that we’re heading into our seasonal adjustment — which you’d be correct to assume. One thing we will be keeping an eye on is how far we dip down during the winter months which could set us up for a really strong summer season.
Sale prices for two-bedroom homes are down a bit this year, while one and three-bedroom homes are posting a modest increase. The real story is four-bedroom homes, up $80k from 2018! The most likely reason: growing families and limited 4+ bedroom inventory are pushing prices sky-high.
The downward trend in interest rates continues. In fact, it has dropped every month this year; almost an entire point since last November. We’ve been spoiled over the last decade with steady, sub 4.5% interest rates. While we witnessed a small taste of rising rates early last year, people aren’t taking low interest rates for granted anymore. Buyers want to capitalize before the trend reverses again.
DAYS ON MARKET
It’s still a seller’s market in Denver, but buyers are able to take a little more time to decide on a home. We would to expect to see increased inventory until the first of the year as buyer’s take a break from their search during the holiday months.
Inventory is slooowly continuing to increase as the year progresses. The real test is whether the trend will continue next spring. Will sellers sitting on the sideline for the last several years finally be confident they can find a replacement home after they sell?
The good news is that active listings are up compared to the previous four years. The bad news is that we need even more in order for it to have a significant impact on home affordability along the Front Range. We still have a ways to go before we get to a balanced housing market.
Rezoning deal could make way for new skyscrapers on Denver’s Sherman Street if developers agree to build affordable housing
Source: Joe Rubino of the Denver Post
Three lots on Sherman Street, east of downtown, may be getting a makeover soon! The Dikeous family, who owns the lots, is lobbying the city to rezone to allow building over 155 feet, the current view plane restriction. The Dikeous family would agree to more than half a million dollars in sidewalk and street repairs, as well as including 211 affordable housing in their projects. The buildings could be as tall as 45 stories. So far the Dikeous family has put 18 months of work and over 75 neighborhood meetings into the proposed deal.
Reporter Joe Rubino dives into the details of the proposed project, community reaction, and history of the view plane restrictions in the full article below.
Rising national unemployment, declining large purchase sales and tumultuous securities markets have some economists forecasting a recession. Despite this, Cushman & Wakefield managing director Jon Hendrickson feels that safe lending practices and Denver’s growth in jobs show a recession is not near.
Hendrickson distinguishes recent recessions from today’s market condition, and why Denver is one of the top markets in the company in the full article.
Home sales slowed this August as the summer nears its end. In July, we saw high sales volume and sales price. August had a large dip in detached home median sales price while attached condos, townhomes, and duplexes rose in median sales price. Interest rates continue to fall, the lowest they’ve been since October 2016! The star player in Denver’s home market continues to be inventory, with the highest number of August active listings in the last six years. This is resulting in homes spending more time on the market, and lower home prices.
Source: Bill Hethcock and Denver Business Journal Staff of the Denver Business Journal
John Burns Real Estate Consulting has analyzed 130 metro areas in the United States for what percentage of their residents can afford an entry-level home in that metro. The report considered a home priced 20% lower than the median in that area as entry level and assumed a 5% down payment. It features an interactive infographic which allows you to compare Denver with other major metros across the country! Denver, with 50.2% of it’s residents able to afford a home in this range, is much more affordable than cities like San Francisco (11%), NYC (36%) and Boulder (40%), but less so than Boston (51%) and Chicago (59%) and several other metros.
Just how big is the barrier to entry to owning a home in Denver? Here are some numbers for the five most expensive zip codes in the city:
Cost of Entry in Denver's Most Expensive ZIP Codes
|ZIP Code||Denver Neighborhoods within ZIP Code||Median Home Value||Monthly Mortgage Payment||Minimum Salary Required|
Looking for a neighborhood that’s more friendly to your pocketbook? Reach out to our team and we’d love to help you find your next place.
Source: Aldo Svaldi of the Denver Post
Anyone with a “Native” bumper sticker can tell you how fast home prices have risen in the past decade. The median price is now over five times the median household income, a new record which has economists scratching their heads. This article touches on a frequently overlooked contributor to our current home prices: the size of new homes. With new homes going bigger and bigger in scale, some developers are focusing on building smaller homes to be able to reach the “median” Denver residents.
Read more about the reasons for the rise in Denver home prices and how one developer, Mission Homes, is thinking small in the full article below!