- Metrolist released its July report last Friday.
- Prices eked our another record.
- First-time buyers need to venture outside their 1st neighborhood choice.
Another month, another home price record for the Denver area — but just barely.
The average price of a single-family home closed in July was $374,729, which edged out the previous record set in June of $372,937 by a mere 0.475 percent, shows a Metrolist report released last Friday.
The average sales price was up 7.48 percent from July 2013, when the price of a home sold and closed was $348,650.
The median sales price of a single-family home in July also was a record $315,000, besting the previous record set in June of $312,500 by 0.8 percent.
Year-over-year, the median price rose by 8.62 percent from $290,000 in July 2013.
Other metrics for all homes, single-family and townhomes/condos, reported by Metrolist include:
- There were 9,772 active listing in July, up 6.6 percent from the 9,163 in June, but down 8 percent from the 10,627 in July 2013.
- Some 6,956 new listings came on the market last month, a 4.8 percent drop from the 7,305 in June and a 3.4 percent drop from the 7,202 in July 2013.
- The 6,795 homes placed under contract in July was 4.9 percent more than the 6,072 in July 2013, but a 3.7 percent drop 7,059 in June.
- There were 5,726 homes sold in July, a 5.1 percent drop from the 6,072 sales in July 2013 and a 1.6 percent drop from the 5,854 in June.
- The average price of all homes sold was a record $335,427, barely higher than the previous record of $335,274 in June, but 5.2 percent higher than the $318,814 of single-family homes and condos in July 2013.
Single-family activity last month showed a similar trend:
- There were 4,262 single-family home sales in July, about a 2 percent drop from the 4,365 in June, but a 12.1 percent drop from the 4,849 in July 2013.
- There were 7,874 actively listed single-family homes on the market down 10.3 percent and 6 percent respectively, from July 2013 and June.
- Some 5,131 new single-family listings were added in July, down 7 percent from June and down 10.3 percent from July 2013.
- There were 4,966 single-family homes placed under contract last month, a 5 percent drop from 4,365 in June and a 2.1 percent drop from 5,075 in July 2013.
- And there were 4,262 sold homes in July, a 2 percent drop from the 4,365 in June and a 12.1 percent drop from 4,849 in July 2013.
Single-family homes spent only an average of 27 days on the market in July, a 23 percent improvement from an average of 35 days in July 2013 and a 4 percent improvement from June.
The average price of a condo sold in July was $223,834, little changed from June but up about 12 percent from $200,542 in July 2013. In downtown, Denver, however, condo prices are much higher, with little inventory available below $375,000.
Carter said that the market is “well past the point of being considered a good seller’s market,” to one that is so strong that prospective buyers are wondering what is wrong with a home in a hot Denver neighborhood that hasn’t sold within two weeks.
The slowdown in sales and contract is purely a reflection of the lack of supply, not the lack of demand, he said.
“Sales would be greater if we had more inventory,” Carter said.
Almost every price point is experiencing a great deal of interest from prospective buyers, he said.
In fact, the first-time home buyer price point has basically vanished, a victim of huge demand driving prices so high that what previously would have been considered starter homes, are now unaffordable for those who don’t yet own a home.
“The first-time home category is virtually non-existent,” Carter said.
“It’s getting to the point where the sub-$400,000 range is now a starter home in may central Denver neighborhoods,” he said.
So what is a first-time homebuyer to do?
“Buyers need to realize they need to go outside of their target neighborhood and even their top three neighborhoods,” Carter said.
That might mean instead of West Highland, look for a home in Edgewater, the northern edge of Berkeley, Sunnyside or Wheat Ridge, he said.
“There is a silver lining to this,” Carter said. “As more entry-level buyers start going into these areas, it is going to increase the prices of homes around them.”
Also, more cool restaurants and retailers will “start to infill in these areas,” as more people moved into them after being priced out of their first-choice, trendier neighbohoods .
That already is happening along the West 38th corridor in Wheat Ridge, he noted.
The other thing that seller’s must be aware of is that despite record prices, homes that are over-priced won’t move.
“Despite the lack of inventory, I have never seen buyers be more price conscious than they are today,” Carter said.
“They know they are paying top dollar and they want to feel they are getting some value for their money,” he continued.
“A seller can’t price a home at the top of the market that does not show well. An over-priced home won’t sell. In some hot neighborhoods, if a home isn’t placed under contract in seven to 14 days, buyers wonder what is wrong with it and won’t even look at it.”
The Denver market may not see its usual seasonal slowdown in the fall, Carter said.
“I think a lot of people looking for a home today, were also looking in the first few months of the year,” he said.
While some consumers will give up on finding their dream home, others will continue looking, he 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.