- CAR releases 2nd quarter report.
- Report covers the state and Denver area.
- Home prices at record levels.
Over the weekend, Realtor Anthony Rael listed a 3-bedroom, 3-bathroom home with 1,380-square-feet in Arvada. In 36 hours, Rael had 55 showings and nine offers, all of them above the asking price of $225,000.
It went under contract on Sunday.
“It shows you what a hot price range that is,” said Rael, a Realtor with RE/MAX Alliance.
A second-quarter report released on Monday by the Colorado Association of Realtors largely supports what Rael and other Realtors are seeing on the street.
For single-family, detached homes, some of the highlights of the CAR report for the counties of Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson include:
- The average price of a single-family home closed was a record $368,444, up 8.4 percent from $333,747 in the second quarter of 2013;
- The median price of a single-family home was $310,000, up 9.5 percent from $283,000 in the second quarter of 2013;
- And the average days on the market dropped 27.3 percent to 32 from 44.
- There were 16,554 new listings added to the market in the second quarter, down 8.3 percent from 18,050 in the second quarter of last year.
- The number of under contracts fell 5.5 percent to 13,191 from 13,957 and the number of sold listings fell 9.3 percent to 12,042 from 13,280.
“The lack of supply is why fewer homes sold,” Rael said. “If we had more single-family homes to sell, we would have sold more single-family homes.”
Overall, there was a 2.3-month supply of unsold single-family homes on the market at the end of the second quarter, CAR reported.
While rising prices are great for sellers, it is tough on buyers.
The affordability index dropped 5.1 percent in the second quarter from the second quarter of 2013. Wages and incomes failed to keep pace with rising home prices, according to CAR.
“Affordability is something we have to watch very closely,” Rael said. “With rising prices, every month homes are becoming a little less affordable.”
“The lack of inventory, combined with high demand, especially at the sweet spot in the $225,000 range, is making harder for people to afford to buy a home,” he said.
Denver-area townhome and condominiums did even better in the second quarter than single-family homes:
- The average condo/townhome price in the second quarter rose 13.7 percent to $226,876 from $199,505 in the second quarter of 2013;
- The median price of a condo/townhome that sold was up 11.1 percent to $180,000 from $162,000;
- And days on the market fell by 43.2 percent to 25 from 44.
And unlike single-family homes, both condo closings and under contracts showed double-digit growth on a year-over-year basis.
Under contracts rose 33.4 percent to 4,687 from 3,512, while the number of sold condos rose 29.3 percent to 4,246 from 3,284.
“The difference is that there is quite a bit of condo inventory to choose from,” Rael said.
There were 5,428 new condo listings in the second quarter, a 26.0 percent jump from the second quarter of 2013.
However, even with the growing supply, demand was so strong that there was only a 1.8 percent supply of unsold homes on the market at the end of the second quarter.
“I am pleased to see the strength in the condominium-townhouse market these data represent and am hopeful we will see similar growth in the single-family market as the year progresses,” said Dave Kupernik, CAR spokesperson for the metro Denver region.
“At the same time the very limited inventory we have available makes it a very challenging market for buyers who experience disappointment and frustration as they look for that next home,” Kupernik, the broker-owner of 24K Real Estate continued.
“Rising prices should bring more sellers into the market and help alleviate these problems,” Kupernik said.
“It’s interesting how the DMAR and CAR reports mirror each other, as far as the trends,” Rael said, even though they used different methodologies and tracked different geographic areas.
.The DMAR report tracked the 11-county area and the CAR report was done by Minneapolis-based10-K Research and Marketing.
The DMAR report showed that 33.6 percent of all homes that sold in June were priced between $200,000 to $299,999. That is a full 10 percentage points more than the next most popular price band, of homes priced from $300,000 to $399,999.
Statewide, the housing market showed a similar trend as in the Denver area, according to CAR.
Across all of Colorado, the average sales price for single-family homes rose 7.8 percent to $348,519 in the second quarter from $323,365 a year earlier.The median sales price for a home rose 6.5 percent of $348,519 from $323,365.
Across the state, there were 34,372 new listings at the end of the second quarter, down 3.5 percent from 35,606 in the second quarter of 2013.
The number of sold homes fell 4.9 percent to 22,315 from 23,468, while under contracts dropped 7 percent to 22,667 from 24,384.
There was a 4.5-month supply of single-family homes on the market, statewide.
“Rising prices and an improving inventory are both welcome developments for consumers, especially those with an interest in the condominium-townhouse segment of our markets,” said CAR spokesperson, Karen Levine, who, like Rael is a Realtor with RE/MAX Alliance.
“Looking back over the last 12 months, we can see that in most areas of Colorado the housing market is getting stronger as sellers who were probably waiting for prices to recover are now entering the market,” Levine said. “Hopefully that trend will continue. With more inventory some of the frustration that buyers have experienced by being outbid or seeing homes disappear virtually the moment they hit the market will clear up.”
It was gut-wrenching to tell brokers that their clients hadn’t won the bidding war for the home in Arvada, Rael said.
“I felt bad having to call eight brokers telling them their clients aren’t getting it,” Rael said. One of the other brokers apparently called his client with the bad news as she happened to be driving past the home. “She got out of the car and dropped on her knees on the front lawn sobbing,” Rael said.
“She was devastated.”
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.