I apologize it has been a while since I last did one of these updates as things have been fairly busy for me, which is a good thing. However, these updates are important to share as I always get questions as to how the market is doing, is now a good time to buy or sell, and so on. Now that tax time has passed us, I thought this would be a good time to jump in and see what has been happening in the real estate market since our last communication. My intention is to be a valuable resource to you and keep you up to speed on what is happening in the Denver real estate market so you know you have a true real estate professional in your corner when the time comes.
Denver Metro Area Home Report: March
In our update last Fall, active listings in the Denver market peaked at 7,586 homes for sale in 2017. Following the typical trend line over the last 3-4 years, active listings bottomed out in January of 2018 at 2,736 homes for sale. As of March of this year, we have ticked back up to 4,619 active homes, which is about 6% less homes in inventory over where we were at this time last year. If you recall from prior correspondence, we still clearly have a supply issue to contend with in the Denver market as we are still way off historical norms for the supply of homes available for sale. Case in point…the historical average of listings available in March (1985-2017) is at 15,040 homes for sale, so we are a good 70% off of where we should normally be and have a ways to go before we get back to historical averages.
Here are also some other interesting tidbits of information worth looking at:
- As I eluded to above, supply remains a serious issue for buyers entering the market place. In March of this year, only 943 of the 4,619 active homes for sale were priced $400k or less, which only represents 20% of the listings available for sale. Listings priced above $400k represent 80% of the marketplace and as the majority of buyers are wanting to be $400k or less with affordability, supply of homes in this price range is a very real issue.
- Costs involved with the purchase of land coupled with water and sewer taps leaves builders who are already $100k plus from a dirt start for building a new home. When you factor in increased labor and material costs, builders are not able to address the area of hot demand of $400k and lower from a profitability standpoint. We also have a labor shortage in the construction industry, further driving up these costs which is why you see many of these new homes being built priced at $400k and higher.
- Price, location, and condition are still extremely important! Even though all these stats point to a strong seller’s market, buyers want move in ready properties and those are the ones that tend to move quickly with multiple offers in many cases. Having your home ready, staged, and well marketed will be critical if you are wanting to get top dollar for your property. Working with someone like me can help you to get your home ready as I can provide insight into what people will be looking for as well as some items inspectors might point out during an inspection. Heading off these issues before listing your property will go a long way in getting it sold in a timely manner for a price that you are hoping to get. If your property is in need of some TLC, plan to price accordingly.
- I might also add that some areas will be hotter than others, so while I am giving you overall market data for the Denver Metro area, some of these stats may or may not apply to your specific area. The best thing to do is if you are thinking about selling a home is to take advantage my free, no-hassle consultation as every situation will be a little different and find out what you can reasonably get for your home.
- We are looking at the possibility of four interest rate hikes in 2018. As of 4/19/18, the 30 year mortgage interest rate sits at 4.5%. We haven’t seen rates at these levels since the Fall of 2013 and again back to the Summer of 2011. However, when comparing against long term trends for interest rates we still have a ways to go. Raising rates should also help cool off home prices on a macro scale, but as we still have a supply issue to contend with it will be interesting to see how things unfold over the next 2-3 years. If you are looking to make a change, taking advantage of these historically low interest rates is advisable.
As we are heading into the busy season for real estate, new listings should continue to tick higher until we peak over the Summer and Fall as the trend line over the last few years has remained consistent in this regard.Tags: Buying a Home, Denver Real Estate Market, Front Range Real Estate, Selling a Home