What an intriguing start to 2014 for our Denver metro real estate market. Let’s jump right in and see what’s trending for spring 2014.
# HOMES FOR SALE (INVENTORY) DOWN -56% FROM LAST YEAR!!!!!!!!!! (and – 12.5% From January 2014)
(7,192 Homes For Sale Currently)
- WHAT’S TRENDING: This is definitely the biggest story for our Denver metro real estate market right now. Inventory has plummeted over the last 12 months and is at record lows. We are now in the ‘SELLING SEASON’ as many call it coming into spring and with the # of homes for sale being so low, buyers are really feeling pinched with limited options. Sellers however, are having an easier time selling and prices are holding steady, but finding a home to buy can be a challenge.
- WHAT DOES THIS MEAN: Whenever inventory is below 4-5 months it favors sellers. The longer inventory stays low the more it weighs in their favor. Buyers need to act quickly when they find a home they like and make an aggressive offer. Coming in way under list price expecting a counter is not a prudent strategy and is resulting in getting outbid by other buyers. Sellers need to have a strong pricing & marketing strategy to get the MAXIMUM price & buyer interest immediately when coming on the market. Even more importantly, your listing agent needs to help you work with the appraiser to try and get an appraisal that supports what a buyer is willing to pay. Appraisers are still going on historical data and have a tough time accounting for the premiums buyers are willing to pay in the low-inventory market.
- WHATS TRENDING: Median sold price is $265,000. It was $245,000 in January and $229,900 in January 2013. That’s a BIG jump in a year……15%!!!
- WHAT DOES THIS MEAN: We saw prices dip slightly in January as the Holiday “lull” was in affect. We have seen prices JUMP since then and are trending upwards faster than anticipated. Since it’s only March I anticipate this trend will continue through the year because we are JUST hitting the busier moving season (spring/summer). It will be interesting to see if more sellers put their homes on the market knowing they can sell for a much higher price than before. The big factor is WHERE will the go though. If they will be buying a replacement home sellers MAY continue to be hesitant. Personally don’t think this is a “bubble” and I think the price gains we had will maintain. A lot of economists I have been listening to feel similarly.
AVG DAYS ON MARKET (58 DAYS) DOWN 27% FROM LAST YEAR (but remains steady for 2014)
New listings that are priced well are selling in about 7 days. Then the overpriced listings and short sales etc are taking 60+ days to close. If you are priced well it will sell quickly. If you are WAY over priced, however, buyers still aren’t pulling the trigger on yours. They have learned from the previous crash and don’t want to be “upside-down”.
# SOLD HOMES UP 6% FROM JANUARY BUT DOWN FROM SUMMER 2013
- This is a big stat to watch. I mentioned in my last market update that if we continue to see the slide in # of homes sold, the inventory would increase and the market would start to “normalize”. The more inventory we have, the less competitive it is for buyers, which means prices stop increasing. It looks like the skid has stopped and we are actually seeing MORE home sold as we would expect coming into spring. We saw above the inventory DROPPED from last month….but the # of homes sold is INCREASING….so that means home prices will likely show a even bigger increase in March when we look back on the numbers in my next update.
INTEREST RATES: In fall 2013 I wrote a post on how interest rates are impacting Colorado Real estate market. Well, the Federal Reserve has been announcing they WILL begin tapering off the purchase of mortgage backed securities….what this means is interest rates will rise through 2014. Most experts agree they will settle around 5% late this year and settle there for a while. I will keep my eye on this and report what I’m seeing in my next update.
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