Denver Real Estate Update

We're almost to the end of 2019, so I thought it'd be a good time to shed some light on the state of our current real estate market here in the Denver metro area. Read on to learn more!

As of October 2019, here's what I'm seeing:

1. The average home price (both single family and attached) hit $486,390. While lower than the peak price for 2019, it's still up from the previous month and year over year. Here's how prices look for Single Family and Condo/Townhome:

1. The average days on market for a home hit 33 days - 10% longer than this time last year.
2. The number of active home listings hit 8,557. The average number of homes historically for an October is 15,784.
3. The Months of Inventory (MOI) hit 2.08. This has slowly risen as home inventory and days on market have increased. Still a seller's market though.
4. Homes sold at an average discount of 1.1%. So if a home was listed at $500,000, it would've sold for $494,500 for example.

The market as a whole continues to experience a trend toward a softer seller's market. The most recent data supports this. It's important to note that I still see quite a bit of variety in the experiences of my clients in the market. In some places, homes are still moving in days and selling at a premium. In other places, homes are sitting longer and sellers are more willing to negotiate. With two recent buyer clients who are under contract on homes in Denver and Thornton, we had to compete in multiple offer situations. With another buyer client in Lakewood, we've been negotiating with the seller of the same home for weeks. With two of my recent seller clients, we didn't receive multiple offers. In the Golden "core", I'm seeing homes priced $1MM+ selling at a 4% premium in 7 days! Other clients in the Denver area are seeing more options hitting the market every day. I'm also seeing some places sell at 5-10% discount. Combined with the extremely low interest rates, buyers' enthusiasm and opportunity has never been better. Don't be alarmed though - sellers are still doing very well.

The market stats year-to-date show that our market continues to roll along nicely:

The number of sales is up 1.85% over last year. The average price is still growing, although at a more reasonable rate (2.52% ytd). These two metrics tell me that buyer home demand remains steady.

Yes, home inventory and days on market should continue to grow. All that means is that buyers will have more options to choose from and sellers will need to make sure they are properly accounting for the competition when they list (let me know if you'd like to dive into this more).

Going into 2020, I don't think we'll see anything alarming in our real estate market. Let's look at a few key graphs:

Based on the graph above, we see that with low inventory and population growth, we're near a record low of 1.5-2 homes per 1000 people in the metro area. We'd need to see a growth in inventory for both resale and new construction grow by 4-8 homes per 1000 people to see any significant effect on home prices.

With the population expected to grow at 40,000+ people per year, those people will need somewhere to live. The demand should outweigh supply in both home sales and rentals.

It's important to note too that a recession in the economy doesn't equate to a housing crisis. In fact, in the last 5 recessions, the Denver metro area saw home price growth in 4 of them! (Denver metro area growth in purple)

If you'd like to discuss the market and how it affects your specific search or plans for the Denver metro area, contact me today. Thanks for reading!

Drew Morris, Realtor