Metro Denver Real Estate Market Report - August 2019
While the months of housing inventory still indicate Metro Denver is a seller’s market, it continues to head toward a balanced market with conditions favoring buyers like historically low interest rates, price reductions, more homes to choose from and more time in which to choose.
#DMAR Market Trends
Data Source: REColorado
Overall in the Denver-area residential market, 6.19 percent fewer homes were sold in July compared to the month prior and there was a slight uptick in days on market and price reductions.
The average sold price in the residential market in July was $498,960, down slightly from June’s $500,010, yet still up 4.27 percent year over year. The median sold price, however, was up slightly month over month to $434,000 from $429,000. The average single-family home price was up 0.58 percent from June to $551,516, topped only by the slightly higher average prices in April and May. Year to date, the average sold price was up 1.83 percent. The average condo sale price was down 1.46 percent in July to $362,922; this is lower than the past three months, but up 3.01 percent year to date.
“Realtors are having to adjust their pricing methods and we’ve seen a steady stream of price reductions,” said Jill Schafer, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “Once a home was priced right, sellers received, on average, just under full asking price with a close-to-list-price ratio of 99.32 percent. I’ve heard from homebuyers that they are not feeling the need to run out and see a property on the first day and, if they wait a couple weeks instead, prices often come down.”
Sellers had their homes on the market for what might have felt like a long time compared to a year ago. The median days on market for single-family homes and condos was up 37.50 percent month over month to 11 days. While that percentage may sound significant, on average, home sellers only had to wait three more days to sell their properties in July compared to last year. Year to date it’s taking, on average, 29 days to sell a home compared to 24 days last year.
Notably, fewer new residential listings came on to the market in July, down 12.37 percent from the month before. With fewer new listings, the pool of active listings, which has been growing for the past six months, finally shrunk a bit as the month ended with 9,359 active residential listings. The month of June’s slightly higher 9,520 active listings was the highest metro Denver has experienced in five-and-a-half years.
According to Schafer, “Despite price reductions, we are still statistically in a seller’s market with 1.73 months of inventory across all price ranges. Properties above $1 million have the most inventory with single-family homes at 4.93 months, just under the five months that make a balanced market. We ended July with 4.36 months of condo inventory. Large condo projects like the Coloradan downtown and The Laurel in Cherry Creek have been closing on units pushing up the number of higher-priced condo sales.”
Schafer adds that additional conditions favoring homebuyers include the Federal Reserve recently dropping the interest rates by 0.25 percent, Denver area experiencing low unemployment, an increased number of active listings compared to the recent past, muted home price appreciation and more time on market for homebuyers to make decisions.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999). In July 2019, 240 homes sold and closed for $1 million or greater – down 8.40 percent from June and up 8.60 percent year over year. The closed dollar volume in the luxury segment year to date was $2.2 billion, up 6.25 percent from last year.
The highest-priced single-family home that sold in July was $5,779,000 representing five bedrooms, seven bathrooms and 4,733 above ground square feet in Boulder. The highest-priced condo sale was $2,350,000 representing four bedrooms, four bathrooms and 4,850 above ground square feet in Denver. The listing and selling Realtors® for the condo transaction are DMAR members.
Year over year, the number of homes priced $1 million and oversaw an average sales price increase of 5.38 percent, price-per-square-foot increase of 16.61 percent, and sales volume increase of 14.44 percent.
“The increase in the number of luxury homes that sold and sales volume in this high-end home category is partly attributed to more inventory in the Luxury Market due to home value appreciation seen across metro Denver in recent years,” said Bryan Facendini, DMAR Market Trends Committee member and Metro Denver Realtor®. “On the contrary, the number of homes sold, average sales price and sales volume decreased month over month.”
In July, month over month, price per square foot for single-family homes increased 5.41 percent from $296 to $312, and notably decreased 22.56 percent from $625 to $484 for condos. Year to date, at $612 per square foot, condos realized a significant increase of 23.14 percent from $497 per square foot in 2018, while single-family homes realized a 6.01 percent increase.
Overall in the luxury segment, median days on market jumped to 26 days in July compared to 14 days in June. Year-to-date market activity has improved as median days on market for single-family homes has decreased from 24 days in 2018 to 20 days in 2019, and condos have decreased from 26 days in 2018 to 24 days in 2019.
Facendini adds, “While the market is in transition, there are more opportunities for home sellers to cash in on equity gains and homebuyers to take advantage of more leverage in negotiations than in years past, and also lock-in mortgages at extremely low rates. It will be interesting to see how the next few months perform as mortgage applications have increased compared to last year and some economists think we’ll see an increase of homes sold the second half of the year.”