I am a Realtor selling homes throughout Denver but mostly in the Denver suburbs and my home community of Pradera. Recently, I have been getting calls and questions about the 2017 Denver real estate market from friends and clients. They are worried that our real estate market might be about to crash. I doubt it. And, here’s why.
2017 Denver Real Estate Market Eases
The Denver Metro Area experienced a slowing down in real estate market activity during November but by no means does that mean the market has cooled off. Depending on the price range and location within the Metro area, various indicators and trends tell a story of somewhat slower sales which are not the result of decreased demand. When adjusted for seasonality, home sales definitely show a greater than normal decline for this November over last year. However, other statistics paint a clearer understanding of Denver’s market.
Single family home sales for November 2017 were 4035 homes which represents an 8% decline from November 2016 with 4,621 homes sold. While an 8% decline, while comparing year-over-year production is significant, other factors should be taken into consideration.
Even Fewer Homes For Sale
Most importantly, the number of active listings dropped a surprising 19.5% from October 2017 (5283) to November 2017 (4090). There was simply fewer homes fron which buyers
could select. And, some buyers elected to stay on the sidelines. In addition, the number of new listings submitted during November was down 24% from October. Buyers had already rejected some of those properties left over from previous months. And, most importantly, Sellers were less inclined to sell.
Perhaps, some would-be sellers are holding off for the Spring Denver real estate market. That when prices and sales usually increase significantly. If a Seller can wait a few months, they have historically been rewarded. The Springtime market usually brings usually brings higher prices, multiple offers and quicker sales. That’s great for Sellers. But, buyer beware. This may be the best time to buy a home.
Real Estate Prices Still Increasing
The average sales price increased a strong 9% year-over-year for November. Prices continue to rise strongly, especially in the lower half of the market as demand
remains strong. Above $1 million, trends vary substantially. Location does play a larger factor in demand.
The 2017 Denver real estate market results from November created two not so surprising statistics. First, the supply of inventory declined from seven to five weeks supply. A 12-16 week supply of homes is considered a balanced market. Second, the average days on market increased from 30 days to 32 days year-over-year. In some price ranges and areas, buyers are waiting a bit longer to make a decision. Their sense of urgency is somewhat tempered.
Even though the number of real estate sales declined significantly in November, the overall Denver real estate market remains healthy. Oh, and about that market “crash”, don’t worry. The market is healthy. It would just be healthier if there was an adequate supply of homes for us to sell. That should happen in the spring of 2018.