July Wrap-Up and August Forecast
Welcome to Market Monday, where we review the Denver real estate market and break it down into clear and informative bites! If you have any specific questions or areas of the market you’re curious about, reach out and I will do my best to get you an answer.
It’s a little over a week into August, and we have a wealth of data from July to review and synthesize! The market seems to be continuing at the same pace that we’ve seen over the past few months, still making up for that lost time in March and April. Let’s dive in!
First up: you may have heard that the average detached single family close price in the Denver Metro area is now over $600,000 - in fact, it is $601,863 (this is across the 11 counties of the Metro Area - Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park). That number is a 9.92% increase over this time last year, and a 7.68% increase from last month!
Another number I want to focus on is active listings - available homes on the market. At the end of July, we saw 6449 total active listings (attached + detached). While this is up about 1% from last month, it is down 31% from this time last year! Fewer active listings = low inventory = not enough homes to sell to all of the active buyers out looking. This number is directly tied to the increase in close price - the heavy competition coming from lack of inventory is driving offer prices up and resulting in these appreciation jumps we’re seeing.
Take a look at another graphic showing the dearth of inventory out there. Between 2013-2019, there were 6428 active detached units in July (or 1.7 months of inventory). This year, July only saw 3035 (down to 0.7 months of inventory). As that number goes below 1, we have more buyers in the market than we have homes to sell them. Again, high demand + low supply = multiple offers, competitive situations, and homes selling for $10k, $20k, $30k or more over list price.
The last thing I want to touch on is buying power. With interest rates at unbelievable lows, buyers can get so much more house for the same monthly payment. Take a look at the graphic here. At a 3.5% rate (which we’ve seen in the past few years), a monthly payment total of $2,245 comes out to a $500,000 purchase. At 2.75%, that same monthly payment gets you almost $50,000 more house! The increase in your buying power at this time is just incredible.
Sellers: Average and median days on market are still down, and 51.4% of detached homes in June were under contract in 1 week or less. If you’re considering selling, it appears to still be a great time - but make sure that you’re pricing it right. It’s much better to slightly underprice and have multiple offers bidding the price up than to overprice and languish on the market and have to correct with price reductions.
Buyers: Low rates make it a great time to buy - but the heavy competition definitely makes it harder. If you have patience and are determined to get a foothold in this market, get out there while rates are still low!
Questions or Comments? Leave them below or contact me at the button!
Numbers and stats from Megan Aller, First American Title and Denver Metro Association of Realtors (DMAR).