DMAR Real Estate Market Trends Report | DEC. '15
Denver Housing Inventory Nears Record Low, but Still Higher than Previous Months in 2015; Indicators Suggest 2016 will Continue to be a Healthy Real Estate Market
Inventory of available homes for sale was 5,683 at November month's end – a 21 percent decrease in inventory over the previous month, but five percent more than November 2014.
“Don’t be alarmed by the substantial decreases in market metrics last month including active listings, new listings, number of homes sold and overall sales volume,” said Anthony Rael, Chairman of the Denver Metro Association of REALTORS Market Trends Committee. “While it's good to be aware of how the market is shifting from month-to-month, it's equally important to pay attention to the 12-month trends.”
The month-over-month detached single family home market saw a sharp drop of 39 percent in new listings, but was eight percent more than November 2014. The condo market showed the supply of new listings decreased 34 percent over the previous month, but was up 25 percent year over year (YOY). For the entire residential market, under contracts decreased by 17 percent (up 12 percent YOY), sold listings decreased 30 percent (down 11 percent YOY) and total sales volume dropped 29 percent to $1.23 billion from the previous month (down one percent YOY).
Digging into the housing statistics, 3,374 new listings came on the market while 3,987 homes were placed under contract and 3,373 homes sold and closed.
Notably, the closed sales volume year-to-date is a record $18.5 billion, a 14 percent increase from 2014, which may be attributed to Denver’s economic growth in the last year.
At the DMAR Economic Summit held on November 18, Dr. Paul Bishop, vice president of research for the National Association of REALTORS® (NAR), was a featured speaker and stated that the Denver job market is strong.
Rael comments, “With the job market’s recovery, we can expect to see a healthy real estate market continuing into 2016.”
According to Bishop, the total U.S. Payroll Employment has recovered with eight million jobs lost from 2000-2008, but 12 million gained since. Denver's job market recovered quickly with 76,000 lost from 2000-2008, yet 201,000 jobs gained.
“Adding to a healthy market in the New Year includes the 83 percent of renters that say they want to own a home according to a recent National Association of REALTORS® survey.”
Our monthly report also includes statistics and analyses in its supplemental Luxury Market Report (properties sold for $1 million or greater), Signature Market Report (properties sold between $750,000 and $999,999) and Premier Market Report (properties sold between $500,000 and $749,999). In November 61 homes closed for $1 million or greater – down 32 percent from the previous month and down three percent year over year. The closed dollar volume last month in the luxury segment was approximately 94.32 million, down 33 percent from the previous month and up 3.7 percent year over year.
“The number of luxury single family homes priced over $1 million may be down, but the average price is up,” said Nicole Rufener, member of the DMAR Market Trends Committee.
In fact, forty-six homes sold for an average price of $1.6 million.
“There is almost sixteen months of inventory in this price point which strongly favors the luxury buyer,” said Rufener.
Central Denver's luxury inventory is more balanced with six months of inventory compared to Douglas County where there is more than double, with 13.7 months of inventory. In the north, Broomfield County has even more choices for homebuyers with 15 months of inventory for homes priced over $1 million. The city core luxury market remains strong as we head into the holiday season.
Rufener adds, “If you have a luxury listing that is not moving, especially outside of Denver, it is time to look at price reductions to get it sold.”
On the other hand, more luxury condos sold in November than in the previous month or year over year. Fifteen condos sold for an average price of $1.2 million.
“The price and days on the market cooled off from last month but are stronger than last year,” states Rufener. “There is about four and a half months of inventory, which favors the luxury condo sellers.”
The highest priced single family home sold in November was $6.3 million representing four bedrooms, six bathrooms and 5,588 above ground square feet in Eldorado Springs. The highest priced condo sold in November was $1,555,000 representing four bedrooms, four bathrooms and 3,434 above ground square feet in Cherry Creek North.
►► At its next policy meeting on December 15-16, the Federal Reserve appears ready to raise short-term interest rates due to continued improvement in the job market.