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Home prices up 10%; contracts down 18%

BREAKING NEWS

Highlights:

  • Metrolist releases January report.
  • Average price of homes rises 10%.
  • Contracts up 29% from December.

The average price of all homes sold in January in the Denver area rose 10 percent to $302,251 from $274,754 in January 2013, but the number of under contracts nose-dived by 18 percent, according to a report released late Tuesday.

There were 3,621 homes placed under contract last month, compared with 4,431 in January 2013, according to the report by Metrolist. Contracts in January were 29 percent higher than the 2,807 in December, which for seasonal reasons typically is slow for housing activity.

The number of closings in January, however, rose 13 percent to 3,342 compared with 2,953 in January 2013.

“We are optimistic about the 2014 real estate landscape,” said Kirby Slunaker, CEO and president of Metrolist.

“We advise any consumers who are planning on entering the market for a new home later this year to start looking early,” Slunaker said.

On a month-to-month basis, there were 3,229 sold homes in December, 3 percent fewer than in January.

There were 7,610 unsold homes on the market in January, 7 percent more than the 7,094 in January 2013 and 5 percent more than the 7,275 in December.

The average price of all homes sold in Denver was $310,643 in December, 3 percent higher than in January.

The average price of the 1,901 single-family homes sold in January was $331,198, down 2 percent compared to December and up 10 percent over last year.

Independent broker Gary Bauer said it was a decent start to the year.

He noted new federal Consumer Financial Protection Bureau rules that kicked in on Jan. 10 may have slowed activity a bit.

In addition, with the Denver Broncos heading to the Super Bowl, may have kept some prospective house hunters on the sidelines.

“With everything going on in late January and early February, I think a lot of people just weren’t focused on buying a home,” Bauer said.

“I think a lot of folks were probably keeping track of the market, but buying a home wasn’t their No. 1 priority,” he said.

For that reason, he said he wasn’t surprised by the 18 percent, year-over-year drop in contracts. Contracts represent future closings, while closings represent homes that had been put under contract in previous months.

However, he said it is positive that the number of unsold homes on the market has risen on a month-to-month and on a year-over-year basis, even though the market could handle an increase in inventory.

Consumers are still interested in signing on the dotted line.

“All of the brokers I have been talking to say they are seeing no drop in demand from consumers. The demand is still out there. I think a lot of broker are spending a lot of time now education consumers on what to expect in 2014.”

Bauer said he doesn’t think the 10 percent year-over-year price increase will continue.

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.