After recently being named the "Hottest Home Market in the Nation" by REALTOR.com, what does the state of the real estate market suggest as we push forward through the second half of the year here in the Denver/Boulder area? While having a full six months of data on the books is great for 2015, we are only halfway through and forecasting what is to come can be about as unpredictable as forecasting the Colorado weather. One thing that can be said is that the outlook certainly continues to look promising, especially with interest rates managing to remain low through the summer months.
State of the Market
What we have seen in the form of an overall market snapshot is a 17.9% gain in sold listings among all property types from last year, a 4.3% reduction in median sales price, and a 17.8% decrease in total number of days on market. What we are also seeing is that inventory is creeping up, albeit slowly and still well below normal, evidencing that we are still in the epitome of a seller's market.
What other real estate rumblings have been circling as of late? Well, recently there has been some buzz in the metro areas about the market finally showing some signs of easing up. The Denver Metro Association of REALTORS reports that homebuyers are starting to go under contract with less competing offers, and the occasional price reductions are beginning to make their way to the market. However, this slight feeling of relief is only being felt in the $400k to million dollar range, leaving buyers searching in the sub-$400k category extremely frustrated with a very competitive and saturated market.
Take a look at the graph below. You can see that for both single family and townhome/condos, inventory for active listings has been slowly and steadily climbing from January 2015's numbers, when inventory was at its lowest. What you can also see is that while inventory is growing, we are still far under what is defined and considered to be a "balanced market," further justifying a seller's market.
Another interesting graph to consider is the Percent of List Price Received, as seen below. While we are seeing a small bump in available inventory, the demand for homes is still far outgrowing the supply and continuing to drive prices upward of list. Last year at this time we saw about 99% of list price being received and that number taking an ever-so-slight dip as we headed into the less active winter months. However, this summer came back full swing, detailing a 101.3% of list price received for single family homes and a whopping 103.8% of list price received for townhome/condos. Respectfully, up 2.2% from last year in regard to single family homes and up 3.8% for townhome/condos.
Lastly, and in regard to the current state of the market, median sales price is always an intriguing statistic to watch. As you can see below, the median sales price for single family homes has fluctuated quite a bit over the last year, ultimately bringing us to a 10% reduction in median price from last year at this time, citing the median sales price for single family homes currently at $475,000. Alternatively, we can see the townhome/condo side of things mirror a similar fluctuation throughout the year, but an overall 3.8% INCREASE in median sales price from last year and the median sales price landing right at $275,009.
What are my take-a-ways given all this comparative data?
- Buyer demand is still red hot, competition is ferocious (especially in the sub $400k and townhome/condo categories), and homes are often selling for more than list. The seller's market is here to stay for a little while longer.
- Denver is experiencing substantial economic growth, and the tight supply of housing is resulting in the fastest-moving inventory in the country. It also seems that more buyers are able to pay with cash and do not need to wait for appraisals, and that certainly drives a share of the market and these statistics, tightening the competitive band among offers and shortening the length of time until closing.
- While we are certainly in a strong seller's market, our retention of historically low interest rates available to buyers continues to drive their demand for housing. While buyer competition is strong as noted, we are still in a favorable financial buying environment for those who have chosen to purchase real estate; so we are in a unique position of win/win for both sellers and buyers in our market.
Interested in Boulder County's latest single family home, condo and townhome stats? Click on the June 2015 link to review the latest statistics released by the Boulder Area Realtor Association. There are also year-over-year figures well represented in the report.
If you're interested in selling your property and would like to explore your next steps, or would like me to provide you a Comparative Market Analysis for your property that will include projected market pricing and a Seller's Net Estimate Sheet, please be sure to contact me, Kevin Chard, and I will get to work with your right away to provide you with the reference material you need.