There's nothing quite like getting in the Rockies during the winter months. Breckenridge is one of the most accessible and beautiful places around. A quick 1.5 hour trip from downtown Denver, you can have a full day of skiing/boarding with minimal effort to get there. Here's a photo I took of the beautiful scenery from the top of Imperial Bowl.
Check out Breckenridge Ski Resort's website here.
I recently attended the groundbreaking ceremony for a new neighborhood park in Commerce City. I serve on the Adams County Open Space Advisory Board and was involved in approving a grant to help fund this park. It's rewarding to see how we are helping local cities grow. It's exciting to see how this community is rallying around their goals to see the area expand and improve and just simply make living here great for its citizens for years to come.
Fronterra Park is located just south of 104th Ave at the intersection of Joplin Ave and E 101st Ave. It'll actually be built between two schools: Second Creek Elementary to the south and Stuart Middle School to the north. You can read more about the park and the city's capital improvement program here.
This area of Commerce City has been steadily growing for several years now - the most impactful recent construction being the large King Soopers grocery store at E 104th Ave and Chambers. New construction homes continue to pop up throughout the area as local amenities expand, supporting the population growth. Another great feature of this area is the Buffalo Run Golf Course. Over the last 5 years, we've seen continued price appreciation nearby as indicated by the graph below. This graph shows how the median sale price of this area has changed over the last 5 years.
Looking at 25 current active properties for sale in this community of Commerce City, here are some quick stats:
Average List Price: $381,575.
Average Total Square Footage: 3766.
Average Time on Market: 86 Days (skewed by the new construction on the market in area).
As a real estate broker in the Denver metro area, I'd highly encourage you to check out this area if you are considering purchasing a new home. My past clients who have purchased in this area are very happy with their homes and neighborhoods and received a great "bang for their buck". With the city and its citizens' plans for the future, I see this as a great area for years to come.
The best way to really understand our real estate market is to take the time to dig deep and look at the numbers. Whether you're a home owner wanting to understand how your biggest investment is doing, a renter thinking about taking the plunge into home ownership, or a real estate investor looking for your next opportunity, understanding the market data is critical. So, this month I'm going to walk you through the Colorado Association of Realtors metro Denver quarterly snapshot, explaining each entry to help you make sense of our housing market.
There are five columns in the chart:
Key Metric - self-explanatory
Historical Sparkbars - the data from 2011 to the present
Q3-2013 - the quarterly data from one year ago
Q3-2014 - the most current quarterly data
Percent Change - the yearly percentage difference
New Listings: -8.6 percent. The number of new listings continues to drop, leading to the extremely low inventory of housing in our market. Our supply/demand equation is somewhat out of whack with a huge number of buyers and very few sellers, which has led to our strong market and rising prices the past five years.
Pending/Under Contract: +1.5 percent. There is virtually no change in this number. About the same number of properties has gone under contract this year as last year, but with a lower inventory of homes on the market keeping the inventory of available homes low.
Sold Listings: -7.8 percent. This number surprises a lot of people. Everyone thinks we're having this massively crazy up market and lots and lots of homes must be selling, but in fact it's not true. Because our inventory is so low - close to the lowest inventory per capita ever in metro Denver - there just isn't a big selection of homes to buy. The result being that the number of homes sold is down, not up, and by a significant number.
Median Sales Price: +9.1 percent ($310,000). The median price is the middle price of all homes sold - not the average price. For example, if five homes were sold in an area at the following prices: $100,000, $200,000, $300,000, $800,000, and $900,000, the median priced home is $300,000, but the average priced home is $460,000. A 9.1 percent yearly price increase is strong, but not scary in my opinion. Over the past 40 years metro Denver home prices have increased on average 5.9 percent per year. 9.1 percent is significantly above average, a result of a lots demand for homes, not much supply, a strong employment market, a strong economy, etc. But it's not so high that it will lead to an unpleasant crash in prices, as is predicted in some of the cities currently rising at 15-17 percent per year. We're seeing price increases slow down a bit over the past several quarters which is healthy.
Average Sales Price: +7.2 percent ($366,099). When the Average Sales Price is below the Median Sales Price it means that the lower end of the market is doing somewhat better than the higher end of the market, and of course the opposite is true as well. The fact that both yearly percentage changes are relatively similar means the market is more or less consistent both above and below the average and mean prices.
Percentage of List Price Received: +0.1 percent (99.3 percent). A sign of a very strong market is when the final sales price compared to the list price is almost the same, as it currently is in our market. In a weak market buyers will try to lowball an offer and often get the property well below asking price, but in a market like ours, sellers are getting 99.3 percent of their asking price and that percentage is almost identical to what it was a year ago. This is another sign of a strong, healthy housing market.
Days on Market: -21.1 percent (30 DOM). A normal market of balanced supply and demand will have about 90 days on market (which is the same as six months of inventory in case you run across that number). A stronger market will have fewer days on market, and vice versa. Thirty days on market is incredibly low. It means demand is very high for housing and sellers are selling their homes in near record time. Furthermore, the 21.1 percent drop in DOM means that the demand has increased relative to the supply of homes in the past year, making homes even easier to sell now than they were a year ago. If you have been out looking at homes recently you'll know what I mean. More and more often we run into other folks looking at the property at the same time because there are so few properties on the market and the buyer demand continues to increase. Smart buyers have learned to act quickly to get the home they want, driving the DOM even lower.
Affordability Index: -6.8 percent. This index combines the metro Denver income trends with interest rates and local housing prices to calculate the proportion of local households that can afford the median priced house. The higher the Affordability Index the more affordable homes are. The Affordability Index was very low during the run up of prices that ended in 2007 when homes prices reached record highs. Homes were at all-time affordable highs during the downturn, peaking in 2011. Since then, prices have been increasing enough to lower the Affordability Index year-over-year, continuing with another 6.8% drop in the past 12 months. Buyers having been watching this number fall with dismay the past few years and I think this is one of the many reasons there is so much demand now; renters want to buy when homes are still relatively affordable as they are now (given ultra-low interest rates and strong wages) so we have yet more buyers jumping into the market.
Active Listings: -36.8 percent. The number of active listings has plummeted. In 2007 during the downturn we had over 31,000 homes on the market - a true buyer's market. Now it's the opposite. We had only 7,964 homes on the market at the time of this snapshot, an incredible plunge supporting our seller's market. If you've ever thought about selling, this is the type of market you'll want to sell in!
Months of Supply: -32.4 percent. Months of Supply is the corollary to Days on Market. The lower the Months of Supply, the lower the Days on Market. The 32.4 percent drop in the past year means our housing market continues to tighten as demand rises and supply falls pushing prices ever higher.
If you're reading this you probably have at least a passing interest in real estate. The more you learn the more likely you'll make the right decision when it's time to make a move. I spend my life studying these figures and many others to try help you achieve your goals. Please feel free to contact me if you have any questions or if you'd like me to walk you through the data in specific areas/neighborhoods as well. Have a great holiday season!!
Reporting the market trends for the greater Denver area is a service I love to provide on a monthly basis. The data is interesting, but the story at a macro level continues to be one of a seller's market. Again, this month you can see above that inventory is down a full 20% from this same time last year, the days on market are down 20% and average sold price might end the year showing a double-digit increase.
These market conditions lead to questions such as: "How can we help buyers and investors find opportunities in this market?", and "When is the right time for a seller to take advantage of their rising property values?" One tool that is unique to our company that helps us provide guidance is the price change map that we produce quarterly. This map allows us to give you a clear sense of the current real estate trends in each neighborhood. This more micro level hyper-local data advises you on how to make a better decision whether you're buying, selling or investing. The map below is at too low a resolution to review online as it covers a large geography, however once you have a 36" X 18" hard copy of the map in-hand the information is indeed very interesting!
If we were to sit down to review the map together, here are some examples of what could be gleaned. First, pick a neighborhood that interests you, say City Park. During the past 12 months in City Park the average Days on Market (DOM) for a listed property was 20. There has been a 15% price increase in the past year, and the average sold price was $464,000. There were 23 sales in this time period, and currently there is only 1 Active property for sale, which equates to a .5 month supply. What does this tell us about City Park? It tells us that prices have been rising swiftly in the past year (low DOM and increasing prices) and the inventory is at rock bottom (only 1 Active property on the market!), which will help sellers in the neighborhood. With currently only a .5 month supply of homes for sale (6 months of supply is a balancedmarket) this is a red hot neighborhood. This example parallels the more macro level trends and a seller could expect top dollar at this time.
However, if we were to take a look at University, the DOM is 29 and there has been a 7% rise in home prices in the past year. The average sale price is $398,000 and in the previous 12 months there have been 149 sales. Currently there are 18 Active properties and there are 1.4 months of inventory. What this tells us is that University is a strong neighborhood with rising prices and low inventory, but not quite as strong as City Park and a buyer might find an opportunity.
Although the primary printed map we produce focus on Denver Metro, we can produce custom maps for the suburbs as well. Regardless as to where you wish to buy, sell or invest this tool provides a visual heat map as to where the market is hot, and where it might be a bit more temperate.
Give me a call and I'd be happy to sit down with you and review a full size copy of the Denver Metro area map or a custom map for your area of interest.