Denver Real Estate Market Update – December 2018
November numbers are out and again show signs of a bit of balancing in the Denver real estate market.
Average home price in November came in at $462,344. This is down 1.64 percent from October and up 6.47 percent from November 2017. This includes both attached and detached homes.
Let’s break that down a bit. The average sales price for a detached single family home came in at $505,990 down 3.33 percent from October and up 5.41 percent over November of 2017. The average sales price of an attached home (town homes and condos) came in at $358,447 which was up 4.96 over October and up 10.67 percent year over year.
Home sales were also down in November. 3,732 homes sold in November which is down 11.82 percent from October and down 23.60 percent from November of 2017.
At the end of November there were 7,530 homes on the Denver MLS. This was down 11.82 percent from October meaning we saw inventory get a bit tighter in November. However this was an increase of 46.76 percent over November of 2017. So homebuyers in November 2018 are having quite a few more choices than they did a year ago.
Average days on the market is 31. This is the same as it was last November.
Increased inventory, dropping sales and declining home prices: what does it all mean? Obviously we see these seasonal declines every year around this time. But is it more than that? Is this sellers market that we’ve seen for years turning into a buyer’s market?
And what defines whether the real estate market is a sellers market or a buyers market? A real estate market is considered a seller’s market when there is less than five months of inventory. A real estate market is considered a buyer’s market when there is more than six months of inventory. When there is five to six months of inventory the market is balanced. So, where does Denver sit?
On homes priced under a million dollars inventory sits at just under three months. This segment of the market is still a strong seller’s market. However, in the past few years we have seen inventory that was just at around one month. So although this segment is still a seller’s market, things have eased up a bit.
In the luxury market, homes priced over 1 million, we saw 7.22 months of inventory in November. This segment of the market has officially moved into buyer’s market territory.
Is there reason to worry? Well, what do you think? How long could Denver sustain double digit increases in year over year average sales price? A slow down in and a bit of balancing was inevitable and necessary. A healthy rate of growth of average home price sits somewhere around three to four percent per year. In my opinion a bit of balancing is healthy for the Denver real estate market. And it doesn’t mean that the sky is falling!
I believe that we will still see strong sales in 2019 but even more balancing as we head into 2020. I do not fear a bubble burst as I don’t believe Denver is in a real estate bubble. Denver has a very strong economy and healthy job market.
But if you are planning to sell a home in the near future do realize that the market is not as much in your favor as it was in the last few years. Homes in lower price ranges will still sell fast. But homes in higher price ranges will likely take a bit longer to sell. Many Denver area home sellers have not come to this realization yet and have the expectation that they can just plop a sign in the yard and get ten offers within days. Seller’s, do yourself a favor and price your home right when you list it.
Be sure to check back next month when we take a look at how 2017 finished out!
And if you are planning to buy or sell a home in the near future contact Courtney Murphy. Courtney is a Denver metro Realtor with experience in both resale and new built home sales.