- DMAR releases July report.
- Report shows same trend as Metrolist.
- Few entry level homes available.
While there is a dearth of homes for first-time buyers, homes priced from $1 million to just under $2 million showed a 15.7 percent spike from June, according to the report by the Denver Metro Association of Realtors.
“The first-time home buyer market is just not there,” said Anthony Rael, chairman of DMAR’s Market Trend Committee.
“At the same time, the luxury market is one of the strongest submarkets, if not the strongest submarket, which kind of jumped out in the report,” Rael said.
“It really is a tale of two markets,” Rael added.
The DMAR report covers the 11 counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.
The report showed the same trend as a report released last Friday by Metrolist, although the reports do not cover the exact same geographies.
Overall, both reports showed moderately rising home values, strong demand and quick sales.
Rael said the Denver-area is approaching a “Goldilocks” market that is neither too hot nor too cold.
Both the DMAR and Metrolist reports showed the average and median price of single-family homes being sold just barely surpassing the previous record prices set in June.
“Prices were basically flat from June, but the median price (of $315,000) was up about 8 percent from July 2013 and the average price (of $375,955) was up about 7 percent,” from a year earlier, Rael said.
He said he is pleased with the appreciation of homes.
“If homes keep rising in the 5 percent to 7 percent range that is a healthy amount of appreciation,” Rael said. “If we start getting close to double-digit appreciation, I would be worried that the Denver market will quickly become unaffordable for a lot of people.”
Even now, though, it is tough for people who have never owned a home, who want to buy an entry-level house.
“The first-time home buyer market is just not there,” Rael said. “That is a real challenge.”
All of the publicity about Denver’s hot real estate market is spooking buyers and sellers, according to Rael.
“Both sellers and buyers are influenced by the incessant media buzz about Denver’s ‘hot’ real estate market, including stories of multiple offers, lack of inventory, lack of move-up possibilities, etc,” Rael wrote in the report.
Rael said the many prospective sellers “are on the fence” about putting their homes on the market, because they fear it will sell quickly and they will have no place to move.
“Sellers need to work very closely with their Realtors to come up with a plan,” Rael said. “It might take some creativity, but a Realtor can help you find a way not to have to move twice,” after you sell your home, he said.
There currently are 8,297 active listing on the market, 6.5 percent more the 7,791 in June, but a 17.24 percent drop from the 10,026 in July 2013.
The number of new listings in July rose by 5.6 percent from June to 6,542 , but is down about 10 percent from the 7,288 in July 2013.
However, Rael said it “feels” like there are even more choice for buyers, which may not be fully reflected in the numbers.
That was reaffirmed when he spoke to a number of other Realtors over the weekend who shared that belief.
“Remember, this reports represent a snapshot in a point of time for a macro, 11-county area,” Rael said.
“When you drill down to a very specific neighborhood you might find that a well-priced home might remain on the market for two weeks, while in the past it might have received multiple offers within hours,” he said.
The average days on the market for all homes in July was 28, down 26.3 percent from 38 in July 2013. For single family homes, the average days on the market was 29, down 23.7 percent from 38 a year earlier. For condos, the average days not he market as 26, a 31.6 percent drop from 38 days in July 2013.
Meanwhile, the 5,111 contracts written in July represents a 5.6 percent and a 6.8 percent drop, respectively, from June and from July 2013. That is largely because of the shortage of homes on the market, according to Rael and other brokers.
In the first seven months of the year, total sales volume of single-family homes, townhomes and condominiums hit $9.96 billion, a 2.32 percent increase from $9.73 billion in the first seven months of 2013.
“The Denver metro real estate market remains strong as it continues to march towards a record setting year in total sales volume,” according to Rael.
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.