The Denver real estate market has been hot during the last 60 days. We’ve been so busy that we have hardly had time to post on this blog. I was beginning to wonder if it was only our team at All Denver Real Estate or if the whole market was as busy as we’ve been.
The answer is that it is the whole market. Under contract home sales for the month of May increased an amazing 23% over the same period last year. In fact over 4700 homes and condos went under a sales contract.
What’s even more amazing is that the number of homes for sale has declined a whopping 16% from the previous May. That is the supply side of the supply and demand equation. So, it seems inevitable that as sales increase and inventory declines that this market is likely headed toward stability if the current trend continues.
Of course that’s the rub. Spring is traditionally our top home selling season in Denver. More than all the flowers look rosy. The market always looks rosy. It did last year and it does again this year. The test will be what happens in the months ahead.
The average price of a home is sold in May increased 3% from the prior year Metrolist, the Denver MLS reporting service. But that’s not as hopeful as it sounds for the real estate market. A year ago almost all of the homes sales were below $500,000. Today, well priced homes in the$1m range selling again. So the increase is likely entirely attributable to the change in the price mix of the homes that are selling.
There are hopeful signs on the horizon for the Denver real estate market too. This week, The Denver Business Journal reported that filings for residential foreclosures in Colorado’s largest cities were down 23% in May from the previous period.
The Federal Reserve Board beige book recently noted that business leaders in this region are planning to increase their capital spending and hiring in the months ahead. That could be a very good sign for Denver real estate. “Business contacts were mostly optimistic about future (real estate) sales, and a number of firms reported increased capital spending and hiring plans,” the 10th District Beige Book survey stated.
So, it would be premature to call a bottom to the Denver real estate market. But the signs are hopeful. And buyers moving to Denver are finding that our market is generally stronger than others. Inventories are down and good listings are selling quickly near, and in some cases above, asking prices. By September, will be able to tell if this trend is continuing or was just the usual “Spring selling season”.