Area Real Estate News & Market Trends

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Nov. 19, 2020

November Denver Metro Real Estate Report

 

Here is the 7 County MLS report for October courtesy of SMDRA and REColorado.
  • 5,921 properties closed last month, an increase of 25.6% from last October and a whopping increase of 39% from October 2018 when mortgage rates were nearly 5%.
  • 1,653 buyers closed on attached homes last month, an increase of 23% from a year and a 27.8% increase from 2 Octobers ago.
  • 4,268 buyers closed on detached homes in October, an increase of 26.6% from last October and a 44% increase from 2 years ago. WOW!
  • 5,718 homeowners newly listed their homes for sale last month, an increase of 14.5% from last year and a 14.4% increase from 2 years ago.
  • We saw 1,911 new listings of attached homes, a big 23.7% increase from a year ago.
  • We saw 3,807 new listings of detached homes, a much smaller increase of 10.4% from last October.
  • 5,700 properties went under contract/pending last month, an increase of 28.3% from last year and a HUGE increase of 41% from 2 years ago! 
  • The average closed price for all properties last month was $552,406, an increase of 16% from a year ago. This was over a $75k PRICE INCREASE!
  • Attached homes sold for an average of $388,643, an increase of 7.3% from a year ago.
  • Detached home prices sold for an average of $615,832, a whopping increase of 18.1% and a price increase of $94,000!
  • The median close price last month for all properties was $470k, an annual increase of 11.9% or $50k.
  • The median closed price for an attached home was $335k, a 11.5% price increase.
  • the median closed price for a detached home was $510k, an increase of 13.3% or $60,000! 
  • The average closed to original list price ratio was 99.4%. The last 2 Octobers this number was 97.3% and 97.2%.
  • During October 2016 and 2017 the Average Closed to Original List Price Ratio was 98.2% in 2016 and 98.1% in 2017. This month we were at 99.4%, which is a sign of how much stronger our RE market is TODAY then it was 3 or 4 years ago.
  • Average Days in Market was 23 days down from 33 days or down 30%.
  • Median Days in Market was just days down from 17 days last October, this is a whopping decrease of 65%. I NEVER EVER thought I would see a 65% change in a statistic in just 1 year!
  • We ended October with just 3,975 properties for sale.
  • This puts months of inventory at 0.67 months or roughly 20 days.
  • These cities had a Median Days in Market of just 5 days-Arvada, Highlands Ranch, Lakewood, Littleton, Parker, Thornton, and Westminster. 
  • October was the first month with fewer than 6,000 new listings since April.
  • Where we need more new listings the most is in the $500k-$600k price range.
  • Pendings or under contracts have been > 5,500 for 6 consecutive months or since May.
  • We have sold more than 5,800 properties for 5 consecutive months.
  • 48,596 properties have sold so far this year. We could eclipse 60k sales for the first time ever possibly this year.
  • Since June the average closed sales price has risen by $50,000!
  • Since June the median closed sales price is up by $28k.
  • We have experienced 6 Median DIM for 3 consecutive months.
  • Average DIM has been an average of 23 days for the last 6 months. 
Here is Median Days in Market last month by price range-
  • $100k-$200k-14 days
  • $200k-$300k-8 days
  • $300k-$400k-5 days
  • $400k-$500k-5 days
  • $500k-$600k-7 days
  • $600k-$700k-7 days
  • $700-$800k-8 days
  • $800k-$900k-8 days
  • $900k-$1.1M-11 days 
We spent 6 weeks from March 15th until April 27th under Stay at Home Orders. Here is how our real estate market has responded since May over the last 6 months. These are year over year changes averaged over the last 6 months-
  • New listings are up an average of 4.1%.
  • Pendings are up an average of 25.9%.
  • Solds are up an average of 16.9% over the last 5 months as solds were down 44% in May after the Lock-Down Orders.
  • Median prices are up by an average of 7.1% over the last 6 months. But, here is the trend line since May-up 2.1%, up 4%, up 6.7%, up 8.3%, up 9.9%, up 11.9%. In essence the trend tells me that median home prices are increasing by roughly 2 percentage points a month. Thus, we may see our median prices up by nearly 14% year over year for November. The fact that early demand as measured by Pendings has been increasing by roughly 600% more than the increase in New Listings tells me that this cumulative drop in supply will continue to cause home prices to surge.
  • Months of inventory has been plunging from 1.93 months in May and is now down to 0.67% a drop of 65%.
  • Months of inventory has average just 1.01 months for the last 6 months. And MOI has been at 1 month or less for 5 consecutive months! 
My Thoughts and Comments
  • Normally in a Presidential election year buyer demand slows considerably until after the election; but not this year. Demand is still up over 25% year over year by both measurements of pendings and closings.
  • And supply is increasing by 14% year over year, but it's not enough. More properties closed last month than new homes listed for sale for the first time. This is NOT supposed to ever happen!
  • Demand for attached homes is still very strong; but the supply of attached homes is increasing more than 2 times faster than supply is for detached homes.
  • There was a HUGE difference in price increases between attached and detached homes as average prices only rose 7.3% for attached homes, whereas average prices for detached homes SOARED by 18.1%. This tells me that demand for detached homes IS THROUGH THE ROOF, which is not surprising as buyers want more SPACE, space between homes and space in their homes.
  • It was intriguing to see the median prices of attached homes rise 11.5% while their average prices only rose 7.3%. This tells me the lower half of the market is pushing prices up on attached homes. This is a good sign. However, I bet the downtown Denver condo market slowdown is keeping average prices from rising as fast as I am hearing about lots of price cuts in downtown Denver.
  • The fact that average prices for detached homes rose by an additional 5 percentage points above the median price tells me that bigger homes are demanding the most attention from buyers. Far fewer people are looking for that 3/2 tri-level with 1300 square feet as it's not a big enough home for a family now in the age of COVID.
  • I am flabbergasted to report that average detached home prices are up nearly $95,000 in just 1 year! I never thought I would this big of a price increase!
  • And for buyers waiting to buy for whatever reason they are quickly getting priced out of the market. That $350k detached home early this year may now be $400k and now our buyers need to be looking for an attached home.
  • With winter coming I am afraid COVID will keep people working from home and their kids learning from home. Is your current home up to this triple duty-home/refuge, office, and school? If not, I believe buyer demand will continue to soar and without enough supply home prices will continue to increase by double digits potentially for many months to come.
  • And mortgage rates below 3% will help fuel this amazing demand!
  • Thus, I don't recommend waiting to buy a home.
  • Finally I strongly encourage you to open a Heloc on your home if you don't have one yet to take advantage of today's record high prices as a Heloc can help you purchase more properties, remodel your current home, pay off more expensive debt, or just serve as an emergency savings account.
Posted in Market Updates
Nov. 19, 2020

October Denver Metro Real Estate Report

 

  • 5,807 properties sold and closed last month, an increase of 25.4% from 2019 and a 42.8% increase from September 2018.
  • Attached home sales rose by 23.7% last month year over year.
  • Detached home sales rose by 26.1% last month year over year.
  • Last month 6,055 homeowners newly listed their homes for sale, an increase of 9.6% from last September and a 10.2% increase from September 2018.
  • Attached new listings rose the most by 15.8%, while detached new listings only rose 6.9%.
  • Pendings or under contracts rose by 26.5% to 5,862 properties under contract.
  • The average closed to original list price last month was 99.4%, up from 97.3% a year earlier and 97.7% in September 2018.
  • Average days in market dropped by 10 days to 22 days from 32 days a year ago.
  • Median days in market dropped by 9 days to just 6 days last month. This was a 60% drop. In other words, homes are selling 60% faster this year than last year by this metric.
  • We ended September with 4,555 properties for sale.
  • This puts months of inventory at 0.78 months, the lowest on record. 
  • The average closed price last month for all properties was $530k, an increase of about $59k or 12.4% from September 2019.
  • The average closed price on an attached home last month was $381,439, an increase of 8.1% from a year ago.
  • The average closed price on a detached home last month was $591,391, a $70k price increase from a year ago. This was a whopping 13.3% price increase.
  • The median sold price last month for all properties was $455k, an increase of $41k or 9.9% in 12 months.
  • The median sold price on attached homes increased by 6.5% to $330k.
  • The median sold price on detached homes soared by nearly $60k to $504,890, an increase of an amazing 13.5%. 
The Differences I See Between the 2 Reports
  • The corrected report showed a slightly larger difference in the increase of home sales between detached and attached homes, from 1.2% to 2.4% as detached home sales rose by 26.1% vs a 23.7% increase for attached homes.
  • New listings increased from 8.8% when including Weld County to 9.6% for the 7 county metro area as new listings increased for both property types.
  • Pendings only increased officially by 26.5% and not the 28% reported yesterday.
  • Average prices rose by 12.4% officially and not just 12% reported yesterday.
  • The average sales price of a detached home actually rose by 13.3% in metro Denver and not the 12.9% reported when including Weld County.
  • The median price increased officially by 9.9% instead of the 9.8% I first reported.
  • The median sales price of attached homes only increased by 6.5% last month and not the 8% increase when including Weld County. I honestly can not explain how this is possible knowing that there are far fewer attached homes in Weld County than in the 7 county metro area.
  • The median sales price of detached homes actually increased by an amazing 13.5% and not the 11.9% increase when including Weld County. 
My Thoughts and Observations-
  • The month end inventory level was closer to what I thought it would be.
  • Amazing to see demand as measured by both closings and under contracts both up over 25% year over year.
  • New listings barely outnumbered Pendings.
  • The average closed sales price is over 2 percentage points higher than last year. This means there are even fewer homes selling for a discount. I would like to know who is buying a home at a discount today? But, this also proves you can still over-price a home.
  • Inventory is down 45% from a year ago, which is a strong contributing factor to why homes are selling 60% faster than a year ago when measured by median days in market.
  • When supply is down and demand is up what happens to prices? Prices rise substantially. This is Economics 101.
Posted in Market Updates
Nov. 18, 2020

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Posted in Market Updates