Normally I don’t copy and paste but there are two key points that were hit on that I think are great quotes.
“In April, the average single-family sold home price in metro Denver hit a record high of $553,371, and reached a year-to-date high of $527,244. The average condo sold price in April was $368,565, up 2.62 percent from March and up 2.17 percent year to date.”
“It took twice as long to sell a house so far this year compared to this point in 2018. Schafer comments, “That sounds alarming, doesn’t it? The 100 percent increase is accurate, but when you realize that means the median went from six days on the market in 2018 to 12 days in 2019, it doesn’t look so bad. Less than two weeks on the market is still fast.”
Thanks Jill and DMAR for the quotes. I think this is a great time to evaluate the market. Our prices have risen to the highest they have ever been, yet our days on market has started to increase. If you take a step back and look at this, it makes absolutely no sense. So why is it happening?
Rates have dropped substantially (though they are starting to rise again a bit, but nothing to crazy), inventory has gone up. But our inventory ended with 7012 homes in April… our average amount of homes… 15,399. What is happening is that buyers took advantage of the higher inventory and low rates and kept buying. The biggest area that was felt was in the luxury market, which substantially helped drive up the average price.
In April 2019, 243 homes sold and closed for $1 million or greater – up 32.2 percent from March and 4 percent year over year. The closed dollar volume in the luxury segment year to date is already over $1 billion, up 1.61 percent from last year and up 41.47 percent from 2017. Quoting my friend and yours on the DMAR market stats committee, Andrew Abrams, “This is no April Fool’s joke – the Luxury Market loved April.”
So again, what does it mean?
We have passed by the season of the highest amount of buyers. We are going to begin seeing more inventory and a much slower rate of appreciation of homes for the rest of the year. So if you were a buyer trying to buy to take advantage of the early months and appreciation (you were waiting till summer), you may have missed out. Good news is, rates are closer to 4.5% today which is still a half point or more off where they were towards the end of 2018 and you are going to have a ton of options in moving forward.
It is still a sellers market, so well priced good homes will sell quickly and with multiple offers. However, not every home is a well priced good home, despite what most sellers think. We are going to see days on market continue to climb for the rest of the year. If you are selling, make sure you sell at the right price and put yourself into the best position possible.
Our market is shifting still, but we aren’t close to a regular market so we will see some anomalies as we go further into this year.
Final thought on this one… Our economy is continuing to grow. We are seeing more people able to afford higher priced/luxury homes. We will see continued appreciation of homes over the next few years. This is going to come at the expense of affordable or lower priced homes unfortunately. The Denver metro area has not done a great job of setting itself up for success when it comes to affordable housing and it is not doing nearly enough now. As we see all of the companies that are coming to our metro area and the sustained growth of the economy, we are leaving out a very important group of people. If you are waiting for prices to drop substantially or for that to be fixed… you are going to be waiting for a very long time.
It’s a great market at a cost. BSW Real Estate is committed to working on it and is contacting as many of our representatives as we can about affordable housing… but for the general market, it is going to be awhile till we solve that as a problem. Take your vote seriously, reach out if you have any questions on who is affordable housing friendly on your ballot!
Thanks for reading! See you next month 🙂
If you have any questions, feel free to reach out directly!