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Record year for housing

Highlights:

  • Metrolist releases December, year-end report.
  • December over December 2012 lagged by many metrics.
  • But 2013 was overall a record for Denver housing.

December 2013 Data Press Release_FINAL-2Last year was one for the record books for the Denver-area housing market.

A report released on Wednesday by Metrolist shows a record 54,024 homes closed in 2013, a 17 percent jump from 2012.

“That is a significant increase; I knew it was up but I didn’t think it was by 17 percent,” said Jim Nussbaum, a veteran broker with Kentwood Real Estate.

And the average sales price was $306,910, an increase of almost 10 percent from $279,926 for all homes sold in 2012.

“Our brokers and agents have seen a very busy year with a record-setting selling season,” said Kirby Slunaker, CEO and president of Metrolist Inc.

Last month, 2,807 homes were placed under contract a 9 percent drop from the 3,090 in December 2012 and a 22 percent drop from the 3,607 in November. Typically, there is a large drop in contracts in December from November for seasonal reasons.

There were 3,229 closings in December, down 5 percent from the 3,400 in December 2012 and down 8 percent from the 3,500 in November.

“While the market has cooled slightly at year-end, as one would expect, the numbers year over year are incredible,” Slunaker said.

Gary Bauer, an independent broker, agreed.

“Clearly, all year, 2013 has been one for the record books,” Bauer said.

The average sold price was $310,643 in December, a 7 percent jump from the $289,926 for all homes in December 2012 and a 1 percent increase from the $307,134 average sales price in November.

The total sales volume in homes last year was $16.58 billion, a record in non-inflation adjusted dollars. In 2012, there the sales volume was $12.9 billion. The previous record was $14.94 billion in 2005, which in today’s dollars would be the equivalent of $17.87 billion.

There were only 7,275 unsold homes on the market last month, a record low for a December.

There were 6 percent more homes available a year earlier, when the 7.706 homes available, while the inventory level was 18 percent higher than in November, when there were 8,905 homes on the market. That is a drop of almost 1,120 homes in November.

“I’m not surprised the inventory was down,” Bauer said. “That is just a normal, seasonal drop where everyone is focusing on the traditional holidays and not on buying and selling homes.”

Single-family detached home sales broke records, accounting for 42,762 of the properties sold in 2013 with an average price of $336,381.

The previous record for Denver metro single-family detached home sales was 41,682, set in 2004.

Sales of single family attached homes were up 23 percent over 2012, with 11,262 properties sold in the Denver metro area through November.

The average price for a single family attached home in 2013 was $198,220, a 10 percent increase over 2012.

With the low inventory and strong demand, homes sold quicker. Overall, active listings were down 16 percent in 2013 from 2012. Homes sold about 25 percent faster in 2013 than in 2012. Homes sold after being on the market for an average of only 58 days last year, compared with an average days on the market of 77 in 2012.

In December, homes were on the market for an average of 57 days before selling, a 22 percent drop from the 72 average days on the market in December 2012.

“Again, Denver is performing exceptionally well,” said Peter Niederman, CEO of Kentwood Real Estate.

“Denver is targeted to be one of the top three of the 20 MSAs in the country in 2014,” Niederman said.

Rising employment will help the market more than rising interest rates will hurt it, he said.

“I think we are going to see higher interest rates, but we also are going to see demand remain strong,” he said.

He said “some very smart people on Wall Street are predicting the national unemployment rate to fall to 6 percent.”

If that happens, he said based on the recent history in Colorado and Denver, the unemployment rate could be a half of a percentage point lower here.

“If we had 5.5 percent unemployment rate this year, that would be very good for our economy and the Denver housing market,” he said.

But he said don’t expect double digit or close to double-digit appreciation this year.

“I would be thrilled if we saw a 4 to 6 percent increase,” Niederman said. “We don’t need double-digit appreciation.”

Nussbuam, who has been selling home for more than 40 years, said he thinks the stellar year the stock market had also helped boost home sales.

“I think that really helps confidence,” Nussbaum said. “When you look at your 401(k) and it is really doing well, it gives you the confidence you need to make a big purchase like a home. If your 401(k) is getting crushed, you think this is not a good time to be buying a home,” Nussbaum said.

Nussbuam, who sold about $19 million in homes last year, said 2012 was market by pent-up demand and a low inventory of unsold homes.

“We were talking about the low inventory at our sales meeting today,” Nussbaum said. “It’s not so much people saying they have new listings, but they have a buyer for this kind of property or a buyer from that kind of home. We really need some more well-priced homes to go on the market this year. Those homes will move fast.”

Overall, Nussbaum expects another stellar year in 2014.

“I think this is going to be a good year,” Nussbaum said.

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.