Statistics

Only One Month of Housing Inventory in Denver!

The story remains the same: no inventory!

When I say “no inventory,” I mean that we are consuming homes as fast as the market is producing them (1,429 new listings vs. 1,416 sold units in August). We typically see a reduction in active listings around mid to late fall but not during the summer months. Active listings for August were nearly as low as what we saw this past May. Buyers who were searching back in May suffered through several offer rejections before they were able to get under contract.

It’s not all doom and gloom though! 30-year mortgage rates continue to decrease, homes are taking a few extra days to sell, and the median price dipped slightly from June’s highs.

Pro-tip to buyers: keep your guard up, and treat every new listing like one that will be gone on Monday. Rely on your broker’s offer recommendations and don’t forget the competitive market clauses as a free insurance policy in the event that the home you are submitting an offer on is “the one.”

Want more detailed information about the market in your neighborhood? Please reach out!

Is the housing market slowing down in Denver?

The current catchphrase in Denver’s real estate market is “market shift.” While my day-to-day observations agree with that, the statistics aren’t necessarily reflecting a shift!

Denver’s median sale price dropped $10k to $650,000 since June, which could indicate the start of a slowdown or it could be an early seasonal cool-off driven by a super-hot spring and early summer sell-off. Inventory remained unchanged from June, but days spent on the market dipped to 13 — the lowest it’s been since we began tracking it in 2007! One thing to point out is the majority of July’s closings are from contracts that were signed in June, and June was still a super-hot month. August’s numbers should be interesting and we’ll definitely be chomping at the bit to analyze the data as soon as we can!

Want more detailed information about the market in your neighborhood? Please reach out!

Denver home inventory ticking up slightly

The average number of days homes in Denver spent on the market in June was the lowest it’s been in the last ten years — 14 days! Available home inventory also crept up ever so slightly to 1.2 months, from 1.1 months in May. It’s not much, but we’ll take what we can get these days. Buyers have been waiting a long time for more homes to hit the market, and finally, they have! The number of active listings increased by 22.7% since last month. On the flip side, over this same time period, buyer demand increased by 11%. If interest rates start creeping up, buyer demand will begin to wane and we’ll likely see a small surge in new listings from those who have been on the fence to sell. If you’ve been waiting to list your home, now is the time to take advantage of our hot market before it cools off.

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As prices set new records, why aren’t Denverites selling their homes?

The median sale price has hit an all-time high of $653,000 in Denver. Inventory continues to decrease, and 1,464 homes sold in May, which is 6% above the last five-year average. Active listings were also down 20% in May. People aren’t selling their homes. The question is, why?

Denver is becoming one of the most expensive cities in the country. The median sale price has increased by 31% over the last three years with no sign of cooling off. Traditionally, sellers move every few years for various reasons — size requirement changes, a neighborhood change, or a lifestyle or work change. People are now staying put because they cannot afford their next home in Denver or fear being unable to secure a new home.

Want more detailed information about the market in your neighborhood? Please reach out!

Questions about the Denver real estate bubble that keep us up at night

How long will our fierce, low-inventory, deep seller’s market last? Will it slowly ramp down or will it crash overnight? Are we keeping up with new construction? These are the questions that keep real estate professionals and home buyers up at night!

How is inventory looking?

Every day I look over new homes that hit the market for our clients, a task that used to take up the length of a nice cup of coffee. Now, I can’t even finish my coffee before I run out of properties to view! Over the last seven days, there have only been 204 new listings in Denver and 411 have gone pending. Typically, we measure inventory in months, but we are just shy of 40 days of inventory — days! Denver had 318,445 households as of 2019. An average of 29 homes hit the market each day, which means that only .002% of Denver households are hitting the market each month. Things are certainly tightening up.

How are rising interest rates affecting the market?

As interest rates go up, buyers in the lowest price ranges find themselves forced out of the market. As more of a monthly payment goes toward higher interest rates and not towards purchase power, everyone is shuffled down the totem pole. This reshuffling will reduce buyer demand, but not enough to reshape inventory and get us to a balanced housing market. To significantly increase inventory levels to quell increasing prices, work must be done on the supply side of the equation.

(P.S. We’ll be keeping an eye on the 10-year treasury rate, which mortgage rates have historically been tied to. Glen Weinberg at Fairview Commercial Lending recently published a great write up on the recent inflation jump reported on this month’s CPI Index report and what that means for real estate.)

Can we turn to new construction?

This is where Denver has a severe disadvantage to other cities where “urban sprawl” is an option. Denver is locked in by other municipalities and unable to develop large tracts of land. We aren’t the only city with this problem; as a nation, home building has dropped significantly over the last decade, from an average of 26.3 million homes built per decade from 1970-2010, to only 5.8 million new homes built from 2010-2019. That’s a 77.8% change in the wrong direction! Denver needs new homes to add to the inventory to supplement existing home sales. The city can’t build out, so we have to build up. Increasing density via high- to medium-rise condominium development and finding a compromise to construction defect laws must happen.

Will the market crash?

Lending practices have been corrected since the great housing crash of 2008 and those buying homes are now generally well-qualified. As interest rates increase, I do believe things will start to slow down, but not crash. I mean, we are living through a pandemic that has rocked the world and our housing market is still going straight up! Now, we just need homes to build upwards as well.

April 2021 stats recap: Denver home bidding wars continue to drive up prices

I recently read an article published online by a Denver television network. It was titled: “Home out of range: 65% of Denver homes sell over asking price.” As I began to read, I didn’t even make it through the first sentence before I was met with disappointment. It started, “Littleton, Colorado…” So which is it, Littleton or Denver? Being a stats geek, I had to find out the actual number of Denver listings that closed at or above list price last month, in addition to pulling monthly stats (see below).

We’ve all heard the bidding war stories that are floating around and I knew the number would be high, but the numbers really were astonishing. In April, there were 1,519 homes that closed, and of those, 1,215 sold at list price or above. That means that a staggering 79.9% of homes sold at or above list price! Let that sink in a bit — now it makes even more sense why the median sale price for single family homes jumped another $20k from March, up to $650,000. 😳

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Denver housing market up 18.8% since January

Interest rates are back above 3% again, and the Denver housing market didn’t even notice! In fact, the bidding wars that everyone keeps talking about (which are real) have pushed the median sale price for single family homes past 600K, a record high for Denver and an 18.8% increase since January. Inventory, typically measured in months, was down to 1.06 months in March. There is so much pent-up buyer demand that I believe we’ll soon be measuring it by weeks. This is going to be another fast-paced, multiple-offer summer unless we start seeing a large number of listings hitting the market soon.

Want more detailed information about the market in your neighborhood? Please reach out!

How the -bleep- to buy a home in Denver today

If you are buying a home in Denver right now, you already know how tough the competition is. In fact, most buyers have to submit several offers before they finally get one accepted. We’ve been talking (a lot) about our ridiculously low inventory, the increasing home prices, and the speed at which homes sell. It can be discouraging to say the least, but what’s really happening out there? We dove into February’s closings and here’s what we found out.

Median Original List vs. Close Price

We broke down several price brackets to look at the median close price versus the original list price for single family homes (the original list price is the price a home is first listed at on the market before any price adjustments; the close price is what the home actually sells for). It’s not a surprise, in our current market, that every price group sold above its original list price. If you are one of the lucky ones who’s come out on top this year with a signed contract, you’re probably wishing that these median differences were all that you paid over list price! Again, I want to point out this is the median for all sales within a given price range in Denver. This means that the ridiculously overpriced home that sat on the market for eight months because the sellers didn’t want to admit reality is included in that number. If we could pull this statistic for only homes that went under contract in 7 days or less, there would likely be a huge shift upward in these numbers. Sadly, we’ve reached a limitation on the data the multiple listing service will let us pull or we’d show you!

Historical Data

We wanted to dial out our numbers to show what the last six years have looked like. We’ve been in a deep seller’s market the entire time (a.k.a. a market with less than five months of inventory) and the close-to-original-price ratio remained between 92% and 98% the entire time. Right around the start of the pandemic, the chart shows a drastic change. The most surprising takeaway is that homes priced over $1M, which typically offer buyers the most negotiating power, now happen to have the least!

How to Succeed

Like most savvy buyers, you’re probably already aware of the hot market strategies you can employ to help you successfully buy a home. They will work if you give yourself margin. This means you’ll need to leave room to escalate your offer price upward to beat out other buyers. Unfortunately, this also means you’ll need to consider looking at homes in a lower price range than your maximum budget. Developing the right “secret sauce” for your home purchase game plan is crucial to success. While the ratios we shared above reflect Denver as a whole, you’ll want to have your broker share more stats specific to the neighborhood you’re searching in. Or, you could wave the white flag of surrender and have your broker send this text to the listing agent of the house you’re trying to buy:

The choice is yours! 😂

Denver home prices reach an all time high

In case you missed it, the single family housing market is on 🔥 ! February’s numbers are in and the median sales price jumped 11% from January and almost 23% from February 2020’s benchmark. In fact, this month’s median sale price has set an all time high for Denver City and County. With interest rates hovering around all time lows and outpacing buyer demand, don’t expect to see the rising home prices reverse until inventory increases dramatically. Until then, we will be on the edge of our seats, feverishly watching!

Want more detailed information about the market in your neighborhood? Please reach out!

The Top Denver Neighborhoods of 2020

What a year 2020 was! With everything that happened in the world unrelated to real estate, you would have hoped we’d be seeing numbers that are kinder (a.k.a. less expensive) this year. One word to sum that up: nope!

The Most and Least Expensive Denver Neighborhoods

We’ve all heard how expensive Denver is becoming. When we look at the stats for the entire Front Range, counties like Boulder and Clear Creek tend to skew the numbers. Dialing into just Denver County, we see that the median sale price (MSP) went up 9.1% in 2020, but some neighborhoods have seen an even higher increase. So, to answer the burning question, is Denver becoming unaffordable? I’ll let you decide…

  • The most affordable neighborhood (bottom of the list) rose 18.3% from 2019, to an MSP of $210,000.
  • Over 51% of Denver’s neighborhoods have an MSP greater than $500,000 (up from 45% of neighborhoods in 2019).
  • Only 43% of Denver’s neighborhoods are in the $250k-$500k range (down from 50% in 2019).
  • Just 3.8% of neighborhoods have an MSP of less than $250,000 (unchanged from 2019).

See Full List

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

We ranked Denver’s hottest up-and-coming neighborhoods using historical price growth data. A newcomer to our MSP growth list in 2020 was Hilltop, at 28.9% above Denver’s county’s already high appreciation of 9.1% (total appreciation of 38.0%!). Hilltop’s appreciation was driven by its larger lots and high amount of home renovations and new construction compared to its peer neighborhoods. The word is also getting out about Clayton, which boosted its neighborhood appreciation by 25.6% (approximately $100k of appreciation).

On the flip side, Union Station was hit hard by the pandemic as large-building living became less popular and an influx of new listings hit the market. Other traditionally hot neighborhoods saw a cool-off as well, which was welcomed by buyers searching in those neighborhoods.

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