Welcome to the July edition of the 2014 Denver Real Estate Market Newsletter.
LOOKING FORWARD – DENVER’S SHIFTING REAL ESTATE MARKET
Before looking foward, we need to look back to where we have been.
2006 to 2011: Prior to the Great Recession, Denver’s housing market peaked in the fall of 2006 followed by a double dip bottom in 2009 and 2011. From the 2006 peak to the 2011 trough we witnessed a buyer’s market:
- Average home sold price dropped 22.8%
- Number of homes sold dropped 22.2%
- Distressed sales (bank owned and short sales) accounted for more than 33% of homes sold
2011 to June 2014: Since the 2011 bottom, Denver has charged forward with one of the strongest real estate markets in the country. From the 2011 trough to the present we have observed a strong seller’s market:
- Denver’s average sold price appreciated over 30%, above and beyond the pre-recession levels, one of only four cities in the nation to do so
- Inventory of homes available for sale plummeted by 63%
- Number of homes sold increased 30%
- Days on market dropped nearly 74%
- Distressed sales accounted for less than 1 in 10 homes sold
Strong buyer demand coupled with the low inventory of homes for sale, fewer distressed sales, and record low interest rates snapped Denver back into a seller’s market in 2012.
MOVING FORWARD Since 2006, we shifted from a strong buyer’s market to a strong seller’s market. Moving forward, I expect a shift to a balanced market, an equalization between buyer demand and seller supply. While buyer demand is expected to remain strong, the inventory of homes for sale is anticipated to increase. The shift to a balanced market will take time, possibly extending into 2015.
- BUYER DEMAND
- Expected to remain strong due to low interest rates and an improving job market
- The almost non-existent inventory of less expensive homes has created pent-up buyer demand
- The high cost of renting will convert renters to buyers.
- Bank owned sales and short sales are almost non-existent as home prices have risen
- Institutional investors are effectively out of the market as distressed sales have diminished
- SELLER SUPPLY
- Inventory of homes for sale will increase with higher home prices
- Home price appreciation is expected to slow, in the range of 1-3%, as inventories return
- Sellers who have been underwater are now in an equity position and listing their homes for sale
- Home builders are building, helping to meet a larger portion of buyer demand
- What will happen to rates going forward into 2015? Difficult to say, but when they do rise, the inventory of homes for sale will increase and home affordability will decrease. The Mortgage Bankers Association predicts rates will hit 4.7% by the end of the year.
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Search homes for sale on your smart phone or tablet using my home search app. Log in to the iTunes Store or Google Play and download the Keller Williams app. When prompted, type in the code ‘KWKB85L’. For simple downloading instructions use this link, www.PaulMobileApp.com.
JUNE 2014 REAL ESTATE MARKET TRENDS
DENVER REAL ESTATE MARKET TRENDS
REAL ESTATE NEWS
Denver home prices up 9% compared to May 2013 Read More
Metro Denver home-buying hits $1.9 billion in June sales Read more
Inventory of homes for sale increases 9.1% Read more
Home builders’ confidence surges thanks to better jobs market Read more
Denver apartment development boom intensifies Read more
Colorado foreclosures down 43% from a year ago Read more
Metro Denver unemployment rate 5.2% in June, down 1.8% from last year Read more
Colorado sees sharp drop in unemployment to 5.5% Read more
Colorado likely to add 68,000 jobs by year’s end Read more
Douglas County tops in nation for job growth Read more
United Airlines reclaiming 175 jobs in Denver that were previously outsourced Read more
US patent office opens in Denver, adding 120 jobs and economic impact of $440M Read more
RTD board of directors gives FasTracks approval to build a $207 million extension to its southeast rail line into Douglas County Read more
Construction of pedestrian crossing on west side of Quebec Street over C-470 to continue through November Read More
Denver making great strides in reducing nitrogen dioxide levels of air pollution compared to 10 years ago Read more
Colorado energy bills are cheapest in the nation, report says Read more
Who are Colorado’s wealthiest families? Read more
THANK YOU FOR YOUR BUSINESS AND REFERRALS!
If you or someone you know is thinking about buying or selling a home, please let me know. It would be my pleasure to work with you or your referral. My commitment to my clients is to treat them with the utmost care as they work towards buying or selling a home. Referrals are the core of my business and are always appreciated.
Free Real Estate Tools
When searching for homes for sale anywhere in the Denver metro area use this link, Interactive Map-Based Home Search. This interactive, map-based home search tool makes looking for homes fun and easy. If you are interested in a specific neighborhood, whether it is your current neighborhood or the one that you hope to move to someday, this site can send you e-mail notifications when new homes come onto the market. Happy home searching!
Please call me with your real estate questions. I’m always happy to help you navigate through this constantly changing real estate market!