Is it mid-February already?? I was just glancing down at my reminder to write this, and couldn’t believe it was that time already! The great news is we have the Super Bowl Champion Denver Broncos to celebrate in town, as I think the City of Denver has been totally enthralled in the playoff run and Super Bowl victory over the last month. With that said, let’s jump in and see what’s been happening in the Denver market with real estate.
Denver Metro Area Home Report: January
Housing inventory levels remain low! If you recall last month when I wrote about this housing inventory had dropped way back down to the 4,300 range, and we are still sitting at those levels as of the end of January. This current level for active inventory still keeps us at all-time lows with homes available for sale in the Denver market, as housing demand is expected to remain strong for the time being. Interestingly, of that active inventory only 680 of those homes were priced $300,000 and lower, meaning 85% of the active inventory remains in the $300,000 and higher range. This very clearly shows that the $100k-$300k range for real estate still continues to be red hot as that still seems to be the sweet spot for many buyers in the marketplace. Once we start heading above $400k in home price, demand starts to drop off at a noticeable rate.
Another statistic I found interesting is the number of homes that actually sold in January took a dramatic drop over December with a 40% decline in home sales. However, seasonality likely had everything to do with that as we were coming off the holidays, poor weather conditions, the Super Bowl run with the Denver Broncos, and this is typically the slow time of year for real estate anyway. As we head into March and April, I think we will start to see an uptick in activity across the board with active inventory and homes selling, so if you are or anyone you know is considering selling a home or even considering buying a home feel free to reach out to me for a free market analysis as I’m here to help!
Recent stock market volatility has also likely put a damper on some of this activity in January as well, as the S&P 500 is now down 7.2% YTD as of 2/16/16. This will likely keep interest rates at historic lows, but my personal opinion is rates need to start gradually heading higher. Keeping interest rates this low will ultimately keep lending allocated towards more highly qualified home buyers as loan profitability for many banks is being squeezed with lower interest rates along with a whole other range of issues. We also need to consider capping real estate prices at some point with higher interest rates, as home affordability will continue to be an issue for many buyers as we can see from the stats I outlined above.
Source: DMAR February Newsletter and YahooFinance.com