DMAR Market Highlights:
- According to Forbes, Denver is the most competitive housing market in the nation. We are in the compression phase of the housing cycle, meaning there are far fewer homes for sale than buyers looking to buy. This causes prices to increase.
- Denver is 6th on the national list of apartments completed, with 11,700 apartments built in the city last year.
- Boulder ranked 4th in 2018’s list of hotbeds for luxury real estate.
- Vail ranked the most expensive city in the nation for condos, with median price of $1,629 per square foot.
- Cherry Hills Village was ranked the 3rd richest suburb in the country.
- Denver is one of the top-20 U.S. markets for commercial construction starts.
- Denver has become a magnet for millennial migration in the years since the Great Recession, according to a new Brookings Institution report.
- Custom home builders are paying around $500,000 to $600,000 for scrape-and-build lots to build $1 million-plus homes. In some Denver luxury neighborhoods, land prices have topped $800,000.
- A strong job market and a decline in mortgage rates will contribute to housing demand as both factors are good for buyers. Mortgage applications increased 6% the last week in February.
- GDP increased 3.1% in 2018, the first annual increase over 3% in 10 years.
- Active residential inventory increased 47% year-over-year to 6,017. For context, the average in February from 1985-2018 was 14,008 active listings, the record-high in February 2006 was 25,484 listings, and the record low in February 2017 was 3,878 listings.
- Sold residential homes decreased by more than 10% year-over-year.
- Average sold price increased 0.66% year-over-year.
- Days on market increased by more than 21% year-over-year.
Source: Denver Metro Real Estate Market Trends Report, March 2019, by the Denver Metro Association of REALTORS®.
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Metro Denver Market Review by Megan Aller
“Many of us wondered if 2018 was the last hurrah in the phenomenal Seller’s Market Denver Metro has been experiencing since the recovery fueled by major population growth and stifled development starting in 2013. Since our recovery from the recession, prices have more than doubled in Metro Denver since the bottom of the market in 2008-2012. With such a prolonged Seller’s Market we’ve all been wondering when it will end. Based off initial numbers coming in as our market goes through its traditional pick up in February, it’s not looking like it will be this year – at least for the detached market.
While it’s true that we have more inventory available in 2019, prices are determined not only by supply but also demand. If inventory rises, and demand follows behind it then prices continue to rise. Prices are determined by the relationship between supply and demand, and not by just one side or the other. Here are the highlights:
- As anticipated active units remain down from January to February. Detached homes units for sale remain near historic lows with 3,463 units for sale. While DSF units are up 7.9% from the same month one year ago, units under contract are up 9.4% creating year 7 of Denver’s Extreme Seller’s Market.
- Days on market were down to 41 average days to contract, or 15 median days to contract. Both metrics are declining at a similar pace as previous years in this cycle. (2013-2018)
- It is typical to see home prices begin to increase from January to February, this year average price came in at $506,434 a 2.1% change, but median price reported a slight seasonal dip YOY to $427,000. Median price will likely pop back up in March.
- Close to list price ratio rebounded in February up to 99.1%. Original to Sold price ratio also jumped to 98.0%. Both metrics are likely to climb over the next 3-4 months.
- Flash sales, or units under contract in the first weekend were up in February to 38.3%, this measurement picked up early in 2019, by spring we could be seeing as high as 55-60%.
- 49.5% of homes closed in February sold for at or over their asking price. This metric is also anticipated to rise through June.
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Related Denver real estate news headlines:
- This Denver suburb saw double-digit growth in rents in just one year, study says
- Metro Denver home prices drop in February for first time in 7 years
National Real Estate Market – updated March 2019
The headlines may capture attention but they are out of sync with the data.
And that concludes this month’s Denver Real estate market update