The Market

Numbers to know.

Are Denver Home Prices Starting another Climb?

Denver Real Estate Market Snapshot - October 2018

Interest rates continue to rise, and September’s brief lull in rising median home prices and sales has disappeared. Prices in October have reached a quarterly high. While inventory is up over last year it is down from the past month. Buyers expecting to gain some leverage in what appeared to be a home market about to recede might have to readjust their budgets. Some of us may be letting out a sigh of relief that average prices are below the $500,000+ mark we reached this spring. However, October is a reminder that we still live in one of the most competitive real estate markets in the country.

Are signs pointing to a cooling market?

 

Denver Real Estate Market Snapshot - September 2018

All “statistical” signs are pointing to a slowing housing market, with one exception. From the snapshot above one things sticks out pretty clearly: median prices are up. Lets dive into things and see what’s driving our real estate market.

INTEREST RATES

If you’ve been following the Federal Reserve or listening to the news it shouldn’t be a big surprise to hear that rates are creeping up. Since July they increased by .13% (and .82% since Sept of 2017). If you are timing rates, now is the time to lock. If you wait, it will most likely cost you!

 

Now for a little more context… we’ve been really spoiled over the last five years with sub 4.5% rates! Just like when you are at an epic party — it has to end sometime, right?!

Ok, now we have it dialed way back to 1972. We are still in historically low territory compared to the last four decades. Just ask anyone that bought a home in the early 1980’s what they think of today’s rates. #perspective
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Interest Rates Going Up, Denver Home Prices Coming Down

Denver Real Estate Market Snapshot - June 2018

Interest rates continued climbing throughout the second quarter, while median home prices started a two month decline. The struggle to find a home for the average buyer is still very real, there are some emerging trends worth keeping an eye on. Is the market changing or is it an early seasonal correction?

INTEREST RATES

Does the chart below remind you of the elevation gain during your last run? 2018’s interest rates started out at 3.9% and are currently at 4.57%. Most experts predict continued increases for the remainder of 2018. If you are currently under contract, a conversation with your lender to lock your rate should be priority number one.

The last time interest rates were at the 4.5% mark was in December of 2013. For those financing their purchase, increasing rates decrease buying power. For those on a budget, that means lowering your max price to accommodate the extra interest in your payment. (more…)

Rising Rates Not Slowing Buyer Demand for Homes in Denver

Denver Real Estate Market Snapshot - May 2018
Rising interest rates along with the Federal Reserves recent rate hike announcements should help cool Denver’s crazy housing market, right? In reality it’s actually tightening it up a bit. Buyers are starting to feel pressure on their budget not just from rising home prices but now increasing interest rates are reducing their buying power. Month’s of inventory keeps decreasing as consumption keeps increasing. We suppose the old saying, “get em’ while they’re hot!” applies this summer.

$512,250!?! Denver Home Prices Reaching New Highs

Denver Real Estate Market Snapshot - April 2018

$512,250!?! Yes, that’s exactly how we said it when we saw the median prices for single-family, detached homes. We surely thought it was a mistake in our computations, but just like Santa we checked it twice. Home prices have been climbing a proverbial 14er since January, where they’re up a whopping 15.1% from this time a year ago. Interest rates are trending up, but buyer demand is still strong with inventory trickling down to 1.2 months. The length of time it’s taking homes to sell took a dramatic dive down to 20 days, almost a week shorter than the previous month. 88 more homes sold in April compared with March, indicating demand is just waiting for new inventory to hit the market.

Some Much Needed Relief for Denver Renters

Some good news for Denver renters — the rental market appears to be cooling down a little bit! As we head into our peak rental season expect rental rates to remain close to the same or increase ever so slightly. The exception to this will be sought after, hot neighborhoods where people are willing to pay a premium for a high walk score.

Denver, Colorado Rental Rates Q1 2018

Denver two year look back for median rental rates.

The first quarter started out relatively flat compared to the sharp increase seen at the beginning of 2017. New apartments have steadily been hitting the Denver market, helping to slow the rent increases we’ve been accustomed to. As we get into prime leasing season (May – August) we would expect to see a very slight increase for three and four bedroom units, since new units of this size aren’t being built as frequently as their smaller counterparts. One and two bedroom rent will likely remain flat and could even show a small drop due to the new inventory hitting the market each month.

Denver Median Rental Rates by Bedroom Q1 2018

Median Denver Metro Area Rents ($)

As we look at median rental rates around the metro area, one neighborhood that sticks out is Union Station (LoDo). Why? The 1 year change was -0.9%, mainly due to the increased competition from new rental units hitting the market. The 5-year change was only 1.7% — proof that added density and inventory is what Denver needs to curb rising rents.

View map in larger screen here.

Note: Think of this map as a 30,000 feet view of the rental prices in Denver. You can click on each neighborhood for exact numbers and year-over-year statistics.
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Interest Rates on the Rise

Denver Real Estate Market Snapshot - March 2018

Median home prices are still on the rise and it appears interest rates are starting to follow. In early February we started to see an abrupt increase in 30-year fixed interest rates. The Fed indicated there will likely be three rate hikes this year and they are starting to make good on their promise.

INTEREST RATES

Interest rates are slowly but surely making their way back up to 2013 rates. One thing to note are the peaks and valleys that happened in 2013. We will be anxiously watching for any repeated trends over the next 12 months. If rates do ease, I would expect to see a small surge in purchases for those trying to time interest rate movements. That wouldn’t be a welcome addition to the buyer demand we are currently seeing.

30-Year Fixed Rate Mortgages 2013-2018

Coming in hot at 4.4%, the current interest rate is at it’s highest since February 2014. This is a 0.24% increase from the interest rate in March 2017 (4.20%). That equates to an increase in the interest payment per month of 23 bucks per $100k borrowed.

30-Year Fixed Rate Mortgages Previous 12 Months - March 2018

But don’t worry, this is still incredibly low, especially when you compare it to the rates that the Baby Boomers bought their homes for — over 16%!

30-Year Fixed Rate Mortgages 1972-2018

AVERAGE DAYS ON MARKET

Average days on market is the same as it was this time last year. In Denver County, homes are currently on the market for an average of 26 days. In December it was 37, which is an indicator of a seasonal slowdown. But now, things are starting to pick up and we desperately need inventory. Good homes are being snatched up quickly and over list price. Like $40k over list price!

Average Days on Market | Denver County | March 2018

Comparing “apples to apples” the average days on market are tracking  the same or slightly downward for most counties, the exception being Broomfield.

Average Days on Market | Denver Metro Area | March 2018

 

INVENTORY

1.2 months of housing inventory. That’s what we currently have in Denver County. Just a reminder: 6 months of inventory is what our market needs to even out and we haven’t seen that much inventory in years.

Average Housing Inventory Denver Metro Counties March 2018

The amount of homes on the market have decreased by -0.7% since this time last year. In Denver County, 1,311 homes were listed and 1,109 homes sold this March. In March 2017, 1,482 homes were listed and 1,117 sold. It’s not that big of a difference but we need all the homes we can get!

Average Number of Homes for Sale in Denver County 2007-2018

MEDIAN PRICE RANGE

March saw the median sale price for all residential properties (attached + detached) in Denver hold steady at $425k from the previous month. Attached properties were hitting the median at $375k and detached at $471k .

Median Home Prices Denver County 2007-2018

This time last year, the median price range for detached and attached properties was $393k. That is a $32k increase from last year, a 8.1% appreciation rate. This is proof that Denver homes are continually increasing in value at an above normal appreciation rate.

Median Home Prices Denver Metro Counties March 2018

Tight Inventory Driving Home Prices Higher in Denver

Inventory is at an all time low. Again. And the median price range is at an all time high. Again. The median price for a single-family, detached home is now at a staggering $455k, which is an 11.5% increase from this time last year. With our continual low inventory, homes are still flying off the market, selling in an average of 29 days. Last year? Homes stayed on the market just two days longer. A (small) ray of sunshine: mortgage rates are holding steady.  There was a slight decrease to 4.03% in February from 4.17% the year prior. In payment terms, that will save you roughly $30 a month on a $455k home.

Lower interest rate = more buying power.

Don’t hold out too long. With the Fed increasing rates, mortgage experts are hinting the average 30-year mortgage rate will be closer to 5% by year end.

2017 Denver Rental Market Recap

Denver, Colorado Rental Rates 2017

 

2017 ended with a significant increase in rental prices. Rents were up compared to 2016, but the increases are modest compared to the 49% increase from five years ago! The majority of rent growth for 2017 happened in the second half of the year. Are we in for another year of increases or will things stabilize with more inventory hitting the market in the first and second quarter of 2018? Stay tuned…

Median Denver Metro Area Rents ($)

People keep saying rent is expensive in Denver. We have a map to prove it. When you dig into it, median rents are above $1,500 in all but one neighborhood for the fourth quarter. The hot spots shouldn’t be surprising with the exception of Greenwood Village. Denver Tech center living is getting more attractive as well as pricey!

View map in larger screen here. (more…)

2017 Denver Neighborhood Real Estate Stats

2017 was another wild year for Denver real estate. If there were three ways to describe it, it would be: low inventory, low days on market, and multiple offers. All three descriptors attributed to rising home prices and frustrated buyers who are getting priced out of the market.

The Most and Least Expensive Denver Neighborhoods

The median sales price for all of Denver County reached $395k in 2017; a number that has nearly doubled from $200,000, just ten years ago. Hilltop ranked the most expensive neighborhood, with a MSP of $1,115,000 and Goldsmith ranked the most affordable with an MSP of $143k. Breaking it out further:

  • 31% of Denver’s neighborhoods have an MSP of greater than $500,000.
  • 64% of Denver’s hoods landed in the $250k-$500k range, and
  • 5% of neighborhoods had an MSP of less than $250,000, making it tough for buyers with a limited budget.

Most Expensive & Most Affordable Denver Neighborhoods of 2017

See Full List


Map of Median Sale Price by Denver Neighborhood

$143,000 – $1,115,000 is a large spread, there are still some affordable neighborhoods (and even a few opportunities to score a deal in more expensive neighborhoods). Either route you go, fast action, well crafted offers, and of course, a strong offer price are required to come out on top of the negotiations when buying a place.

View map in larger screen here.


Denver Neighborhoods that Appreciated the Most + Least in the Last Year

One of the most common questions we get asked is, “which neighborhoods can we expect to appreciate the most in the upcoming years?” We can’t predict the future but we can rely on past market activity to give us a general direction of where we’re headed. (more…)