2018 is shaping up to be very similar in terms of buyer/seller activity in the Denver area real estate market compared to recent years.
At the end of 2017, we saw the average sale price land at $443,520, which was 8.8% higher than the average sale price in 2016 (not just in December which showed a 12% increase). Based on the lack of homes available on the market (low inventory), we can expect to see continued price appreciation as 2018 continues. I believe this will be a combination of sellers continuing to list at higher prices (because of prices trending upward) and buyers naturally pushing prices up as they encounter multiple offers (which is the norm). There was a very small increase of just 3% in the number of single-family homes sold in 2017 vs. 2016. So while prices rose strongly, the number of sales barely budged because there was so little inventory on the market to buy. I don’t foresee any dramatic change in 2018. I expect a 3-4% increase in 2018 home sales, if only because our Denver metro population is rising over 1% per year and all these people need to live somewhere!
So what’s it like being a buyer or seller in 2018 here in the Denver metro area?
Here’s what I’ve experienced with my clients so far this year:
1. Clients purchasing a brand new home from Lennar in Boulder County were able to secure one of the last available lots/homes in the neighborhood priced in the high-$500s. While we didn’t encounter a typical multiple offer situation, my clients had to move quickly on this home since other parties were also considering this lot/home. Because of this continued demand and lack of inventory from builders as well, we’ll continue to see builders raising prices and selling lots/homes quickly. Unless a builder is sitting on a move-in ready home for weeks/months, you can expect to pay full list price.
2. A young couple searching for a home in Golden went under contract on a home in the high-$400s. We encountered a multiple offer situation and had to use the right strategy to be selected.
3. A client purchasing a brand new Richmond home in Aurora found a great home style and lot location that he liked that was priced in the mid-$400s, but had to make a decision quickly to go under contract. This was the last one available that fit his timeline needs as well. Richmond was also planning to raise prices for it’s next release of homes.
4. A client selling his home priced in the mid-$200s in Westminster experienced a tremendous response from buyers in the market (see the video I posted today on my FB page). Great homes in the mid-$200s can be rare. Combine that with plenty of buyers qualified in that price range and you have a great recipe for a quick sale and multiple offers. We received 8 offers, many of which went $10…20…30k+ over list price!
5. Clients on a house-hunting trip from California were able to secure a home in Denver priced in the high-$800s after winning a multiple offer situation. Even homes in this higher price point will encounter multiple offers.
6. Clients searching for a home in the western Arvada area were able to secure a home priced in the mid-$700s. But, we had to win a multiple offer situation as well!
7. Clients visiting from the DC area had been eyeing a brand new infill development in Lakewood with modern style homes priced in the mid-$600s. We worked with the builder to be the first to submit an offer on one of the remaining TWO homes while other buyers were on stand-by. The other homes had already been secured by other buyers so my client wanted to move quickly.
As you can see, buyer activity in the marketplace is starting off with a bang in 2018! This is typical of this time of year. Buyers tend to enter the marketplace in force after the start of the new year, while sellers tend to lag a little behind the demand. This creates upward pressure on pricing until we see inventory levels typically peak in mid-to-late summer. It appears to be business as usual here in the Denver metro area. If you’d like to chat about the real estate market in a specific neighborhood or city in the Denver metro area or Front Range, please contact me today via phone, text, message, or email. I’d love to buy you a cup of coffee and talk about my favorite subject – Real Estate!