Seasonal Change or Market Adjustment?
The Denver housing market is in flux. Demand remains strong. We have had 300,000 people relocate to area with a jobs and commercial real estate boom. Businesses are relocating to Denver, its a great place to be today. Legal marijuana is not harming the area, but rather adding hundreds of millions of dollars to tax collections. Life is pretty good in Colorado. And we have enjoyed a booming Seller’s Housing Market.
Is The Denver Housing Market Changing?
And the housing market remains incredibly strong and healthy. Homes continue to sell with multiple offers and buyers are waiving objections to get under contract. Buyers continue to bring extra funds for low appraisals. They are still desperately writing love letters to sellers.
Nothing has changed, but then again, everything is changing.
Month over month, the number of homes sold in the Denver metro area slid nearly 12%. That’s a noticeable change. But is it indicative of a market correction or merely the season? After all, we moved from the hot spring/2nd quarter market into July, a favorite time for vacations and family. A time when traditionally, the market slows.
So, this change sounds like a normal correction. But that normal change also impacted overall closed transactions for Denver County. There too, we saw a 12% drop in closings. Some of that can be contributed to less inventory leading to fewer happy buyers and thus lower sales. However, in past sales cycles, low inventory hasn’t kept buyers from taking action. Two years ago we had an incredibly tight market with Denver home buyers snapping up everything. So, here, I feel we are seeing some change to our market place.
And, when viewing the year over year data, the number of homes sold in 2017 is up. Both the month of July and the year as a whole are stronger than last year.
The data shows home prices continue to gain. And inventory continues to be quite restricted. Lower still than even just last year. Quite a bit down from 2014. My feeling is, for entry level and first time home buyers, be prepared for multiple offers and waiving objections. As you move into higher price positions, the market is showing signs of softening from the near feeding frenzy we’ve been living with awhile now.
Denver Homes Are Selling Like Hot Cakes
I have no idea what exactly a hot cake is. I do, for the record, love pancakes. First thing I ever learned to make as a kid and to this day, my Kryptonite. but I diverge. Homes in Denver are selling fast this year. Quicker by far than in past market years. And Denver County homes continue to sell for an average above 100% of list price.
In July 2017, the average Denver home sold for 102% of list price, a decline from a year ago, but still, an awesome outcome and better than full price!
If you are a Colorado first time home buyer, this is important information. Be prepared for multiple offers and for the net sales price to exceed the listing price. Of course, if you are a home seller, this doesn’t mean your house is going to sell for more than you listed it for. Huh? How can that be possible?
So I’m at my bank the other day, and listening to a loan officer complain. His house has been on the market a week. He has had nine showings. So far, it all sounds good. Nine showings. But zero offers. And already his listing agent (not me!!) is suggesting they change the price.
This is part of the different market we are in. Expectations move so quickly in this housing market. Well priced, nicely marketed, stunningly clean and de-cluttered, I just got a house under contract for significantly better than list price. But, some owners are not going through all the steps. They are simply asking top dollar and then wondering why their home is unsold. And the market data backs this up. Sellers have this great moment to make a great sale of their home. But you do need to take the right steps.
I hope this blog has been helpful. The statistics and data in this report come from the Colorado Association of Realtors and ReColorado. I’m Bob Gordon, blogging on all things real estate since 2012. Give me a shout if I can assist you with your real estate needs!