Greater Metropolitan Denver Market Update DECEMBER, 2011
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Michael KozlowskiGreater Metropolitan Denver Market Update DECEMBER, 2011
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Michael KozlowskiGREATER METROPOLITAN DENVER MARKET UPDATE DECEMBER, 2011
Market Metrics: The inventory of active listings at November month end hit another new low at 12,634 units, a decline of 11% month over month and 37% year over year. Buyer demand continues at a seasonally adjusted rate for the holiday season. Declining inventory could become a good news situation.
Monthly Market Recap: Single Family: Active Inventory is 10,213 units at month end Sold units is 2,468 Average Days on Market is 99 Median Sold Price is $230,300 Average Sold Price is $275,951 Condos: Active Inventory is 2,421 units at month end Sold units is 600 Average Days on Market is 105 Median Sold Price is $125,000 Average Sold Price is $153,526
November Year-to-Date Market Recap (2011 versus 2010): Single Family: Active Inventory 10,213 versus 15,232 (33%) Sold Units 28,906 versus 28,355 (2%) Median Price $229,900 vs $230,250 () Average Price $280,230 vs $282,717 (1%) Sales Volume $8.1B versus $8.0B (1%) Days on Market 105 versus 89 (18%)
GREATER METROPOLITAN DENVER MARKET UPDATE DECEMBER, 2011
Condos: Active Inventory 2,421 versus 4,649 (48%) Sold Units 7,325 versus 7,439 (2%) Median Price $125,000 vs $133,000 (6%) Average Price $158,520 vs $160,533 (1%) Sales Volume $1.1B versus $1.1B () Days on Market 117 versus 95 (23%)
Average Price versus Median Price: By definition, Average price is derived by adding all of the individual home sales prices to get a total sales volume ($) for the period. The total sales volume ($) is then divided by the number of sales transactions which results in the Average Price. By definition, Median Price is derived by ranking the highest individual home sales price to the lowest individual home sales price. The point where one half of the transactions are either above or below this price is known as the Median Price.
Advice to Sellers: The holiday season is upon us and traditionally the home owner takes his or her home off the market due to the holiday season, busy schedules, and personal or family time. One must ask if the holiday season is a good time to sell. In a recent survey conducted by the National Association of Realtors, 60% of Real Estate Professionals advise sellers to list a home during the holidays unless they have a preferred strategy going into the new year. The holiday season brings out more serious buyers, the inventory of active listings is low and thus the competition from other properties is less, and cold weather is a benefit in making the home feel cozy. If you do have your home on the market for the holiday season, you need to keep two items in mind. One point is that the home must be kept in ready to show condition and the second point is that more interior photos are needed for marketing to prospective Buyers.
Advice to Buyers: The number of active listings, those homes available for sale, is the lowest it has been in years and here we are at the holiday season. Therefore the Buyers will have fewer homes to choose from. Traditionally Sellers take homes off the market for the holidays. If a home remains on the market over the holidays, you may have a motivated Seller. What does this mean to you? Talk to a RE/MAX Professional to obtain an understanding of the home market at the holiday season. Rents continue to rise in the Denver market and home prices continue to stabilize. Talk to your RE/MAX Professional today about your Lifestyle preferences, the benefits of home ownership, and home affordability.
Common questions
Powered by AIDuring the holiday season, buyers face a lower inventory as sellers traditionally take homes off the market, leaving fewer options. However, homes that remain on the market may indicate motivated sellers. Buyers should consider consulting real estate professionals to understand market conditions during the holidays and assess the potential for negotiating price or terms with such sellers . This differs from other times of the year when there might be more homes available and less urgency in seller motivation, potentially reducing negotiation leverage for buyers .
The decline in active listings during the holiday season can lead to increased competition among buyers due to limited options. Despite the seasonally lower buyer activity, those who are searching tend to be more serious and motivated. Buyers should consider being decisive and prepared to act quickly when desirable properties become available. Consulting with real estate professionals to strategize on negotiations with potentially motivated sellers can also provide an advantage in securing a purchase amidst low inventory conditions .
The sales volume for single-family homes increased from $8.0 billion in 2010 to $8.1 billion in 2011, showing a 1% increase. Meanwhile, the sales volume for condos remained constant at $1.1 billion . Although there is a slight increase in sales volume for single-family homes and stagnation in condos, the overall increase in sales volume amidst declining inventories suggests a relatively stable or stronger market, as the reduced supply might have been balanced by relatively constant demand .
The average days on market for single-family homes increased from 89 days in 2010 to 105 days in 2011, an 18% rise. For condos, the average increased from 95 days to 117 days, marking a 23% increase . These changes suggest that while inventory has decreased, homes are taking longer to sell, which may indicate a cautious buyer market where potential buyers are taking more time to decide, possibly due to stabilizing prices and rising rents. This situation may encourage sellers to be more strategic in their pricing and presentation to attract serious buyers more effectively .
The median price for single-family homes slightly decreased from $230,250 in 2010 to $229,900 in 2011, indicating a stability or slight decline in prices. In contrast, the median price for condos decreased significantly from $133,000 to $125,000, representing a 6% drop . These changes may indicate a stronger demand or less price flexibility in the single-family home segment, while the condo market might have experienced more downward pressure on prices, potentially due to a lower demand or greater supply relative to demand pressures in that segment .
From 2010 to 2011, the active inventory for single-family homes in the Greater Metropolitan Denver market decreased from 15,232 units to 10,213 units, reflecting a 33% decline. Similarly, the condo inventory decreased from 4,649 units to 2,421 units, representing a 48% decline . These changes imply that during the holiday season, buyers have fewer homes to choose from, potentially leading to more competition for the available properties. For sellers, the lower inventory means less competition, making it an opportune time to list their homes, as serious buyers are still actively searching despite the seasonal slowdown .
Average price is calculated by dividing the total sales volume by the number of sales transactions, reflecting the overall price level affected by high and low sales outliers. Median price, being the midpoint where half of transactions are below and half are above, provides a better indicator of the typical transaction price, especially in skewed distributions . Together, these metrics offer a comprehensive understanding of market conditions, where average prices might be high due to a few expensive sales, while median prices offer insight into the broader market trends less influenced by outliers .
The document suggests that rising rents in the Denver market could be due to stabilizing home prices and potentially limited housing supply relative to demand. As rents increase, potential buyers may find home purchase more attractive as a long-term financial strategy, especially with stabilized prices. This trend can lead to increased demand for home buying as individuals and families seek to avoid escalating rental costs, thus impacting the housing market by driving more buyers into the market, potentially increasing competition for available homes .
Sellers are advised to keep their homes in 'ready to show' condition and to use more interior photos for marketing purposes to attract prospective buyers. The holiday season is considered a good time to list homes because inventory is low, and the competition from other properties is reduced. Additionally, the cold weather can make homes feel cozy, appealing to serious buyers who are more likely to be looking during the holiday season .
Real estate professionals might advise that the holiday season brings out more serious buyers, which could offset the typically lower buyer traffic. The decreased inventory during this period means less competition for sellers' listings. Additionally, the holiday atmosphere can make homes appear more inviting, potentially enhancing their marketability. These factors combined create a strategic opportunity for sellers to capitalize on serious buyer interest and potentially attain favorable sale outcomes .