2017 in Review
Yesterday, the Denver Post published an article describing the newest record breaking statistics for the housing market using data from the Denver Metro Association of Realtors (DMAR) 2017 report. Inventory (homes on the market) is, yet again, at an all time low and prices have reached another high point. At the end of 2017, DMAR reported the average home sales price to be $434,097, an increase from the 2016 average of $399,044. This statistic includes single family homes, along with townhomes and condominiums throughout Denver and its suburban neighborhoods. Keep in mind, thankfully, the median home sales price is always a bit lower! As for inventory levels, compared with 2013, active listings at year end was nearly cut in half.
The Big Picture
Nationally, the statistics are a little different. According to the U.S. Department of Housing and Urban Development home inventory (that is, available homes on the market) is actually up. Home prices have, on average, gone up throughout the U.S. as well. However, in most cities, this has incentivized homeowner’s to put their homes on the market. In Colorado however, people are holding onto their homes, in some cases worried about finding a replacement. Additionally, many Denver homeowners realize that by holding onto properties, they can earn passive income by renting homes out to others in the rising rental market. Interest rates on a 30 year mortgage are also lower this year when compared to last year, says the U.S. Department of Housing. Making monthly payments lower than ever for homeowners, even with home prices so high. The real barrier to entry for Buyers is actually their down payment.
There’s some more good news for Buyers too. Even with inventory lower, and overall sales price higher, the sales price (that is, what the home actually sells for) is on average, below the listing (original asking) price. While in the lower price ranges, competing bids are still fairly common, Buyers are still the ones who decide the price of a home .
Another avenue being pursued by Buyers is new construction. If you’re thinking about a new build, check out my earlier blog post to learn about the pros and cons of new construction.
So, what to expect in 2018?
I’ve read a lot of different opinions about what the coming and following years will bring in the Metro Denver market. For years people have been insisting prices will drop, but they defy expectations time and time again.
I believe in 2018, prices will behave similarly to recent years. Prices will rise somewhat in the summer, plateau in the fall, rise again in the winter and ultimately we will end up with a slightly higher average than we started. In the following years, I anticipate this pattern will continue but with less diversity in the average amount. By 2020 I believe prices will plateau, but not decrease. If you’re moving to or in Denver, I truly believe buying is your smartest option. If you have decent credit, you’ll certainly pay less than you would in rent, and be building equity in a market that I believe is sustainable in the long term. I would however, avoid overpaying (people get into bidding wars and sometimes buy more house than they need.
That is a very, very generalized statement, and depending on your real estate goals, can work for or against you.
I’ve worked with clients from up in Boulder to down south in Castle Rock. All throughout, the market for Buyers is tough. That being said, it’s not a losing game for anyone. One of the best assets a Buyer can have is time. That and a good Realtor! If you have time to spare, you can wait for something you really want to come on the market (inventory is low, but still always moving!). However, once you find the home you want, you have to be aggressive!
Ultimately, the metro Denver market has been breaking records and defying expectations year after year. So if you're waiting for the prices to fall, you might be waiting for a long, long time.
For more statistics from 2017, check out the complete DMAR Market Report. The January 2018 Report from DMAR was just released this monring too! Thanks for reading and as always, here’s to your happy home!
All information deemed reliable but not guaranteed and should be independently verified. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) nor Kentwood Real Estate shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless.