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Record home prices in June

Highlights:

  • Metrolist releases June report.
  • Record single-family home prices, but just barely.
  • Market moving toward equilibrium
Snapshot of average home prices. Source: Metrolist

Snapshot of average price of all homes. Source: Metrolist

Home prices in the Denver squeaked out another record in June, besting the previous record set in May by a mere $1,307, or 0.35 percent.

The average price of a single-family home sold in June was $372,937, compared with $371,650 in May. Prices were up about 7 percent from $348,282 in June 2013.

The median price of a single-family home rose 8.7 percent to $312,500 in June from $287,500 in June 2013.

When townhomes and condominiums are included in the mix, the average price was $335,274 in June, up 5.35 percent from $318,293 in June 2013, and down 0.4 percent from $335,955 in May. The median price of all homes in June was $285,000, up 8.5 percent from $262,750 in June 2013 and down just under 3 percent from $276,500 in May.

As far as the supply, there were a total of 9,163 homes on the market in June, a 7 percent decline from the 9,823 in June 2013. However, the supply rose 9 percent from May, when there were 8,401 active listings on the market. For single-family detached homes, there were 7,403 active listings, a 8.1 percent drop from 8,057 in June 2013, but a 10 percent increase from the 6,757 in May.

Less than 2 months supply

“There continues to be a supply of just seven weeks’ worth of inventory in the Denver metro and surrounding area,” said Kirby Slunaker, president and CEO of Metrolist.

A total of 7,305 new listings entered the market in June, a 4 percent decline from the 7,617 in May and a 2.8 percent decline from 7,517 in June 2013.

“The market remains active and homes are moving quickly; however, a slowing of the inflow of new listings will make the market even more competitive,” Slunaker said.

There were 7,059 homes placed under contract in June, a 2.8 percent drop from the 7,260 in June 2013 and a 2 percent dip from 7,228 in May. In other words, there was almost a 1 to 1 ratio between under contracts and new listings. (Under contracts in June 2013 included homes in the “pending” status, which included short sales. That is no longer the case, because of there are so few distressed properties on the market.)

There were a total of 5,854 closings last month, a 1.1 percent increase from the 5,791 a year earlier, and a 9 percent increase from May, when there were 5,349 sales.

Going, going gone

Homes also sold much faster in June.

The average days on the market for all homes in June was 27, down almost 29 percent from 38 in June 2013 and down 7 percent from 29 days in May.

Single-family homes sold in an average of 28 days, down 24 percent from 37 days a year earlier and down 10 percent from 31 days in May.

Condominiums and townhomes saw even bigger improvements in how fast they sold. Attached homes sold in average of 23 days in June, down 47 percent from 43 in June 2013. In May, condominiums and townhomes were on the market for an average of 23 days.

Don’t overprice homes

Overall, the Metrolist statistics paint a picture of a strong and healthy market, said Chris Behrens a broker and an owner at New Era Group.

“It is all good stuff,” Behrens said.

However, even in today’s strong market, where bidding wars are not uncommon, sellers must be careful not to ask too much money for their homes, he said.

“The worst thing someone can do is overprice a home,” Behrens said.

“Some people are thinking is OK to overprice a home and then kind of float down, but I have found that is not a very successful strategy,” he said.

He said consumers house hunting are smarter than they have ever been, when it comes to making what is often the biggest purchase of their lives.

“There is a lot of information out there from a myriad of sources, and people are taking advantage of it,” Behrens said.

“You can price your home at the top of the range, but you can’t exceed the range for a home in your neighborhood,” he said.

If the market is cooling, it is only from the previous frenzied pace, he said.

“Most people think the housing market is heading in the right direction and still has good run ahead of it for the next several years, but the days of throwing a crazy number out there and watching a feeding frenzy…not so much,” Behrens said.

Supply and demand more balanced

The market is moving closer to equilibrium, in which supply and demand are balanced, said Jan Nelsen, a broker with Kentwood City Properties.

“Inventory is rising slowly but surely, and the market is evening out,” Nelsen said. “It’s moving away from being a strong seller’s market, which is good for everybody.”

However, it still depends on where the home is and the price point.

“If you are in the suburbs, it is not necessarily a seller’s market, but if it is in the city and it is under $500,000, it is still a seller’s market,” she said.

“I think when you get to the $1 million range, it is more in equilibrium,” Nelsen said.

“Not that long ago, if a home was priced between $1 million and $2 million in a hot Denver neighborhood you had to snap it up. Now, it’s not that crazy.”

Meanwhile, the market in July is showing its usual seasonal slow down, said Paul Brunger of Keller Williams: Realty.

“People went on vacation around the 4th and haven’t gotten back into the full swing of things yet,” he said.

The number of homes on the market seemed to pick up in July, he said.

“I’ve noticed quite a bit more inventory available in July than even in June, which gives buyers more time to think about it,” he said.
However, he said demand still remains strong.

“I still see quite a bit of demand, especially with interest in new homes,” Brunger said.

‘I’ve been doing some work with Thomas Sattler Homes (which is building models on infill sites chosen by consumers), and we are getting bombarded with people who want information on those new homes.

“I think what this is saying is that overall, people are feeling better about our recovering economy.”

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.