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August Quick Stats
Denver Metro Single Family Housing Stats:
Active Listings: 9,060
- Down 33% from Aug. ‘11
Under Contracts: 4,191
- Up 18% from Aug. ‘11
Solds: 3,730
- Up 17% from Aug. ‘11
Average Price: $311,893
- Up 10% from Aug. ‘11
Average Days on Market: 63
- Down 34% from Aug. ‘11
Denver Metro Condo Housing Stats:
Active Listings: 1,766
- Down 45% from Aug. ‘11
Under Contracts: 1,005
- Up 2% from Aug. ‘11
Solds: 955
- Up 20% from Aug. ‘11
Average Price: $183,359
- Up 9% from Aug. ‘11
Average Days on Market: 69
- Down 38% from Aug. ‘11
Real Estate News
This month let’s take a closer look at some important submarkets around town. Each table gives us a snapshot of what is happening in different neighborhoods of greater Denver.
Denver Northeast
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $234,189 | $266,143 | +13.6% |
| Days on Market | 93 | 53 | -43% |
| # of Active Listings | 583 | 332 | -43.1% |
| # of Closed Sales – YTD | 1,450 | 1,577 | +8.8% |
Denver Northwest
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $286,670 | $328,344 | +14.5% |
| Days on Market | 60 | 43 | -28.3% |
| # of Active Listings | 382 | 233 | -39% |
| # of Closed Sales – YTD | 757 | 900 | +18.9% |
Denver Southeast
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $435,073 | $447,635 | +2.9% |
| Days on Market | 96 | 56 | -41.7% |
| # of Active Listings | 1,127 | 704 | -37.5% |
| # of Closed Sales – YTD | 1,683 | 2,129 | +26.5% |
Denver Southwest
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $136,573 | $179,822 | +31.7% |
| Days on Market | 92 | 59 | -35.9% |
| # of Active Listings | 417 | 226 | -45.8% |
| # of Closed Sales – YTD | 945 | 1,015 | +7.4% |
Aurora North
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $107,694 | $121,889 | +13.2% |
| Days on Market | 72 | 41 | -43.1% |
| # of Active Listings | 201 | 72 | -64.2% |
| # of Closed Sales – YTD | 538 | 481 | -10.6% |
Aurora South
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $183,523 | $213,356 | +16.3% |
| Days on Market | 94 | 54 | -42.6% |
| # of Active Listings | 671 | 396 | -41% |
| # of Closed Sales – YTD | 1,882 | 1,981 | +5.3% |
Bromfield
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $343,462 | $340,470 | -0.9% |
| Days on Market | 88 | 70 | -20.5% |
| # of Active Listings | 282 | 172 | -39% |
| # of Closed Sales – YTD | 444 | 538 | +21.2% |
Highlands Ranch, Lone Tree
|
Category |
Aug, ‘11 |
Aug, ‘12 |
Change |
| Average Price | $358,316 | $369,417 | +3.1% |
| Days on Market | 88 | 50 | -43.2% |
| # of Active Listings | 529 | 314 | -40.6% |
| # of Closed Sales – YTD | 1,136 | 1,376 | +21.1% |
Buyers
We talk a lot in this Newsletter about the local housing market but it’s important to understand that our market does not exist in a vacuum; it is part of a state, regional, and national market as well. The turnaround we’re experiencing is not a local phenomenon, it is occurring in the majority of real estate markets around the country. This is important to understand lest you think that our market is just a weird anomaly temporarily bucking the rest of the country, and destined to stumble again in the near future.
What we are seeing is the turnaround portion of a predictable, 7-10 year market cycle with national roots. Nearly seven years after the housing bubble burst, most indexes of house prices around the country are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines. Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. The fraction of homes that are vacant is at its lowest level since 2006.
Even builders are getting back into the game. Nationally, builders began work on 26% more single-family homes in May 2012 than May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth.
Why is this important? Because it says that real estate is, after an incredibly long and painful collapse, back as an engine of growth for the U.S. And even more important, families are back buying homes and planning for their futures in a safe, sustainable way. Please call me at 303.550.8563 if I can help you with your next real estate purchase.
Sellers
I read an article last week in the Wall Street Journal whose title caught my eye: Stunned Home Buyers Find the Bidding Wars are Back. I was impressed because more often than not I find the media are 6-12 months behind what I’m actually seeing on the street, reporting on trends well after they’ve appeared in the marketplace. But this time I had to give them credit because this is exactly what I’m seeing in my business. Since late winter/early spring my sellers have been shocked not only by the number of offers they’re getting but by the quality of the offers as well. Gone are the days when buyers submitted lowball offers to test the market. These types of buyers quickly learn to make a serious offer or they get flushed out of the market. I had a listing recently that had 5 offers on it within 4 days, and three were above asking price. A year or two ago this would’ve been unheard of, but today it is all but the norm.
The article went on to say “A new development is catching home buyers off guard as the spring sales season gets under way: Pending-home sales hit their highest level since 2010, spurring the return of real-estate bidding wars. Bidding wars are back. From California to Florida, many buyers are increasingly competing for the same house. Unlike the bidding wars that typified the go-go years and largely reflected surging sales, today’s are a result of supply shortages.”
The Journal may as well have been talking about our market, right here in our backyard, because that is exactly what is happening. And it’s no mystery why. The number of homes on the market is down by a third from this time last year. Even with that incredible lack of inventory, homes under contract are up by 18%. The average price of a home has increased by 10% in the past year and the average days on market (the time it takes to sell a home) has dropped by 34%. Add it all up and we’re in the middle of a screaming hot sellers market!
Want to know what your home is worth? Give me a call at 303.550.8563 and I’ll create a professionally prepared Comparative Market Analysis for your home and let you know.
Investors
In case you didn’t know, the market for buy and hold investors has NEVER been better. An odd combination of economic circumstances has converged to make this one of the best buy and hold markets Denver has ever seen. Here are four reasons why:
- The Home Affordability Index for homes in metro Denver is still at its highest level in record.
- Interest rates are at 50-year lows.
- The rental vacancy rate is 1.5% (the lowest in Denver history).
- Rents rose more last year than any year in a decade, and are still rising.
My clients have been asking me how long this set of circumstances can continue before the market readjusts itself, as it always does. That’s a very difficult question to answer because nobody knows what the future holds. My best guess is that home prices will continue to climb, but this will be offset largely by the dramatic rise in rents which we have been experiencing for the past couple of years. Since it’s hard to imagine interest rates or vacancy rates getting much lower I think that slowly over the next few years we’ll see cashflows begin to suffer for investors purchasing buy and hold investments. But investors who bought recently or who are buying now and locking in record low interest rates will take advantage of the continuing rise in rents to increase their cashflow for the foreseeable future. That’s why 30% of the homes purchased in metro Denver are bought by investors taking advantage of the current circumstances. If you’re interested in learning more about this opportunity give me a call at 303.550.8563 and I’d be happy to discuss it with you.
Mortgages
It’s a great time to get a mortgage! With some of the amazing opportunities available in the real estate market, whether you are a first time buyer or a seasoned investor you should be looking into buying a property with a fantastic mortgage rate. Mortgage rates continue to hover at all-time lows, but many experts in the financial community agree that this is not sustainable and we will eventually see rates increase.
Title Insurance Spotlight
If you have recently purchased or refinanced a home, chances are you have had to get title insurance. Basically, title insurance protects you against problems affecting the title to your home. There are two types of title insurance—a Loan Policy, and an Owner’s Policy. A Loan Policy protects the lender for the amount of the loan, while the Owner’s Policy protects you, the homeowner, for your investment in the property—your equity. In both cases, the title process covers an exhaustive search of public records to make certain the title to the subject property is clear, and covers against future loss if a claim against the property is made. While discovering an issue with your title can seem rather remote, one out of every four title searches reveals a problem with the title. Examples include tax liens, forged signatures in the chain of title, recording errors, title search errors, undisclosed easements, and title claims by missing heirs and/or ex-spouses. Fortunately, these problems would be uncovered in a title search before you even close on your home.