Denver August Market Update: Market Trends Show Gradual Stabilization, Record Setting Growth Streak Ends

spot on article from DMAR....this is directed to realtors, but spot on assessments and good data for buyers/sellers...

The Denver Metro Association of REALTORS® (DMAR) August Real Estate Market Update shows encouraging rise in the number of new homes placed on the market last month. According to this report, July activity shows an increase in the number of new listings for single-family homes and condos, of 6% and 9% respectively, compared to prior month.

July brings relief to year-long inventory shortages in the metro-Denver real estate market.
With first-time homebuyers coming back into the market across the Denver metro area, competition in the market remains tight. Multiple offers, coupled with reports of metro-area home values hitting all-time highs month after month, cause many prospective sellers to hesitate listing their home, citing uncertainty in the fact that they will easily find a property to buy in return.

According to Rael, however, the Denver market is still strong and the strategy for both buyers and sellers to successfully navigate the market is simple:


More and more sellers are contemplating whether to list their property now or wait for a more balanced market, with promising prospects of finding a replacement home. At this point, it’s critical, for sellers to honestly ask themselves: “what am I actually waiting for?” Simply hoping for prices to increase can be a double-edge sword. When they sell at the peak of the market they’ll likely end up buying at the peak as well, so it becomes a relative point.

Both sellers and buyers are influenced by the incessant media buzz about Denver’s “hot” real estate market, including stories of multiple offers, lack of inventory, lack of move-up possibility, etc. In my opinion, the Denver market is still strong and sellers need to note that homes that are priced right and show well, sell quickly (sometimes even within days). Also, buyers should be reminded that they should be patient with, quite possibly, the biggest transaction of their life. It’s high time to feel inspired by the potential that Denver holds, as one of the fastest growing cities and economies in the country.

A big challenge for REALTORS® is to manage seller’s expectations by providing creative and effective ways to list/sell their property, while simultaneously putting the seller in a good position to become a strong contingent buyer. In order to facilitate a smooth transition into a replacement home, it’s ideal for sellers to have backup offers in place on their current home, in case the first buyer drops out. Open communication between the listing agent, selling agent, and mortgage lender is vital to holding these types of “domino” transactions together.

There’s a feeling among the DMAR membership that prices will begin to stabilize as a result of gradual increase in inventory returns to the market. We hope to see a healthier and more balanced market for the rest of the year and in 2015.”
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Market Insights:

⇒The traditional prime “selling season” is wrapping up – yet the pent-up demand for housing remains very strong and does not appear to be cooling off as we head into fall.


⇒Unfortunately, with only three weeks of inventory in the $100,000 to $300,000 price ranges –which typically represents the first-time buyer market – finding enough to choose from continues to be a major challenge for buyers & brokers alike.


⇒The Median and Average SOLD prices for Single Family Homes remained unchanged from June.


⇒The Condo market saw a slight uptick in Median price, while the average price remained unchanged during that same period.


⇒Interest rates remained stable in July – hovering in the low-to mid 4% range for a 30-year fixed loan.


⇒First-time home buyers are lining up to get into the market and new household formations are happening.



⇒Our month-over-month market comparison of Single Family Homes showed a sharp drop in actual sales for all price points except the luxury market from the $1,000,000 to $1,999,999 range which saw a 15.7% spike from the previous month. The Condo market showed improvement in the number of sales in the $200,000 to $299,999 and $400,000 to $499,999 ranges respectively.


⇒Our year-over-year market comparison of Single Family Homes showed significant drops in actual SOLD properties from $0 to $299,999, but improvements across the board over $300,000 and an astounding 17% rise in properties over $2,000,000.


⇒The Condo market showed improvement in the number of SOLD units in every price range – in particular the $500,000 to $699,999 range where SOLD units have skyrocketed 161% year-over-year. The exception to the strong condo market is in the under $99,999 range, but that can be attributed to the fact that prices are increasing, and therefore it’s becoming more and more challenging to find condos in this price range.