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Home sales soar in 2012

end_of_year_strong_2_lgDenver-area buyers snapped up almost $13 billion in homes in 2012, almost a 30 percent jump from the dollar volume in 2011, according to a report released today.

Buyers paid $12.95 billion for 46,299 homes last year, a 28.6 percent increase in the dollar volume of $10.06 billion in 2011 and a 17.5 percent from the 39,387 closings in 2011, shows the report released by independent broker Gary Bauer, who based his report on Metrolist data.

There were 56,412 homes placed under contract last year, a 19.1 percent increase from the 47,373 in 2011.

The average price of a single-family home sold in all of 2012 broke the $300,000 barrier, averaging $304,178 for the entire year, an 8.7 percent increase from the year-to-date average of $279,858 in 2011. In December, the average price of a single-family home closed was $315,451, a 14.5 percent increase from the $275,610 average in December 2011 and a 2.8 percent increase from $306,773 in November. The median price of a home sold in December was $255,000, up 11.3 percent from $230,000 in December 2011.

“It was just a great year,” Bauer said. “Buyer demand began at the beginning of the year and continued through year-end. The buyer demand is still out there. From talking to other brokers, the momentum has continued through January. The first seven days of January have been very positive.”

Metrolist, separately, released its own report on December tallies on Monday.

Both Bauer’s and the Metrolist report showed there were only 7,706 unsold homes on the market, a 29.9 percent drop from the 10,993 available homes for sale in December 2011.

The last time inventory number were in that range occurred in December 1993, when there were 7,711 homes on the market. To put that into perspective, the population of the Denver area grew 52.5 percent from 1990 to 2010, according to the U.S. Census Bureau.  percent.

“Some of these numbers are absolutely staggering — the dollar volume rising 28.6 percent, the 19 percent increase in contracts and the 17.5 percent increase in closings,” said Chris Mygatt, president of Coldwell Banker Residential in Colorado.

“Why these numbers are so strong, in a big part, is because the inventory numbers are so low,” Mygatt said. “That is putting pressures on buyers and creating opportunities for sellers.”

Single-family detached homes accounted for almost 83 percent of the inventory in December, with condos accounting for about 17 percent. The single-family inventory is down almost 73 percent from its peak in January 2006, while the condo inventory has dropped almost 85 percent from its peak, noted Megan Aller, of Land Title Guarantee Co.

With supply and demand so out of whack, one might expect prices to being rising more than they have, Mygatt said.

“What I find most significant is that prices have not exploded,” Mygatt said. “I think that is going to be a key to a successful 2013 and 2014. Prices are starting to rise here, but at a reasonable and sustainable pace. That is not true in other markets. In Arizona and parts of Florida, prices already are showing double-digit gains. I just can’t help thinking: here we go again,” with another boom-bust cycle starting.

Mygatt said that consumers in the Denver area are not willing to bid up prices, like buyers are doing in Phoenix and Miami.

“Colorado buyers are more conservative by their nature and are unwilling to participate in these explosive price increases,” Mygatt said. “Even in cases where there are multiple offers for a home, a buyer in the Denver area isn’t willing to bid $50,000 more on a $240,000 house. That is happening in other markets. In Denver, a buyer might offer $5,000 more and if he is out-bid will wait for another opportunity.”

Also, while the Denver-area luxury market is improving, prices at the high-end have not risen enough to dramatically lift the average price for the overall market, he said. “Luxury homes aren’t pulling up the rest of the market,” Mygatt said.

Kirby Slunaker, president of Metrolist, said that Denver is part of a national resurgence in housing.

“All over the country, home sales in the winter months proved to be a bright spot in the headlines,” Slunaker said. He said buyers in the Denver area are signing on the dotted line quickly, so their dream homes don’t slip through their fingers.

“We’re seeing a lot of competition for homes that are available,” Slunaker said. “With an average of 73 days on the market for December home sales, we anticipate the market to remain brisk in 2013.”

A year earlier, it took 107 days to sell a home, a 32 percent increase.

Separately on Tuesday, Clear Capital, a California-based real estate data company, predicted that the home prices in the Aurora-Denver area would fall by 0.2 percent in 2013 from 2012, essentially unchanged, after showing an 11 percent year-over-year gain the fourth quarter of 2012.

Bauer said he agrees with that prediction “somewhat.”

Bauer said that while sales activity in 2013 looks good, year-over-year price increases will remain flat. He also said big questions remain on what will happen with the national economy and global events, which can impact local market. However, mortgage rates are expected to continue to hover near their historical low rates, which will keep consumers interested in buying a home, he said.

Jim Nussbaum, a broker with Kentwood Real Estate, who is entering his 43rd year of selling homes in the Denver area, said 2012 was the first year that consumer confidence has returned for the first time since the national real estate downturn began.

“There is much more confidence in the market,” Nussbaum said. “That it is really nice to see, after all of these years.”

Nussbaum estimates he sold $21 million or $22 million in homes last year. “That puts me in the top 7 percent or 8 percent of Kentwood brokers. I feel pretty good about that.”

Nussbaum even closed on a $1.3 million home on New Year’s Eve.

“It was a foreclosure, and I and the listing broker convinced the bank to put a new $50,000 roof on the house.”

YearHome closingsSales volume in billions of dollarsInflation-adjusted prices in 2011 dollars
199015,619$2,411,638$4,239,923
199126,410$2,669,553$4,434,162
199233,477$3,572,215$5,760,101
199335,598$4,460,312$6,983,086
199438.072$4,779,902$7,296,607
199536,038$4,910,865$7,289,927
199638,101$5,515,801$7,953,089
199740,185$6,180,791$8,712,027
199845,951$7,775,673$10,791,966
199946,742$8,769,875$11,908,802
200048,611$10,558,877$13,911,275
200147,832$11,152,517$14,254,428
200247,919$11,713,824$14,730,508
200347,966$12,168,929$14,961,830
200453,482$14,223,031$17,033,754
200553,106$14,940,422$17,307,562
200650,244$14,516,321$16,289,817
200749,789$14,031,634$15,309,857
200847,837$11,954,290$12,560,990
200942,070$10,198,333$10,754,177
201038,818$9,976,222$10,350,225
201139,387$10,063,056$10,257,957
201246,289$12,945,247

YearJanuaryMarchJuneSeptemberDecember
199014,75316,05316,71114,66311,839
199111,81013,04713,66912,68710,147
199210,56811,84212,60212,5409,631
19939,0769,0209,50010,3497,711
19947,7487,9389,55710,5308,569
19958,7169,60111,16211,6499,854
199610,19610,62813,49913,58411,000
199711,01112,24013,84414,24711,093
199811,2578,89913,60113,44910,352
19999,0658,4419,18810,3108,097
20008,01013,14710,48210,9988,820
20019,54018,32216,82619,18016,482
200216,20023,96721,53823,37020,676
200321,28824,90926,53326,07121,623
200421,94623,02328,04326,97520,891
200520,91727,30925,81727,20023,572
200624,38726,43031,90031,45024,534
200724,35026,43030,25630,33524,603
200824,48925,51626,10423,92319,600
200919,74820,62820,85319,83416,456
201017,78520,57423,24023,33218,887
201118,80419,32019,58017,13912,531
201210,44310,32510,92510,4707,707

Source: Gary Bauer, Metrolist

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.