Record home prices in July

Highlights:

  • Metrolist released its July report last Friday.
  • Prices eked our another record.
  • First-time buyers need to venture outside their 1st neighborhood choice.
A 982-square-foot unit at 1401 Wewatta St. is priced at $375,000, Even though this is a condo, the average price of a single-family home is approaching sold in July is approaching $375,000.

A 982-square-foot unit at 1401 Wewatta St. is priced at $375,000, Even though this is a condo, the average price of a single-family home is approaching sold in July is approaching $375,000.

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.

“Without seeing the data, in general, the numbers seem to be on track,” Ryan Carter, a broker with 8z Real Estate, said on Friday.

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.

Ryan Carter

Ryan Carter

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.

 

 

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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Comments

  1. Nice report and nice record! I’m a little surprised that prices are not up more considering the strength of the job market and extreme demand for housing.

  2. “Single-family homes spent only an average of 27 days on the market in July” = See it, buy it. Today!
    @Ryan: no love for Wheat Ridge?

  3. Am I the only one that finds all these news bits about higher home prices and record sales at the high end quite discouraging? This can’t be good news at for the vast majority of buyers, movers, homeowners, etc…. I’ve never heard anyone saying, gee that’s great food prices are up again. Or, wow, collage tuition at record highs, yippee!

    I believe I saw a graphic recently in Atlantic Cities that showed that the Denver metro area has some of the highest housing debt to income ratios in the nation (Link below). With the price of housing increasing, that seems like it just means that only the rich are getting into housing right now. I don’t watch the real estate numbers all that closely, but it seems like the housing market that is doing well based on articles on John’s blog is at the high end and not so much at the low or middle ends of the spectrum.

    I know that I, as a mid-range buyer, have been keeping my eyes open for land, and there is virtually nothing in my price range in the metro area. I have to go to Pine, Perry Park, Byers, or far flung places like that.

    http://www.citylab.com/housing/2014/07/the-new-geography-of-us-consumer-debt/375193/

    • Just wait until inflation really takes off, prices of everything will skyrocket. You’ll say “gee I wish I would have bought when prices had only doubled.”

        • DJ, last week you told us that the economy will crash leading to the FED to go on a massive spending spree that will trigger inflation like the US has never expirenced before. So, why not wait until the crash happens before buying?

          • It is possible that inflation will take off due to the amount of currency already printed, so you can’t necessarily count on a crash beforehand, although a crash would be ideal as far as opportunity goes.

    • It may seem that high end house prices are increasing more than low end house prices, but that is only because high end realtors do disproportionately more marketing. It is actually the other way around.

  4. DJ- this was your coment last week when I said the FED was done with QE and signaled rates would rise 6-9 months after.

    “There are lots of factors that come into play, but right now we have a fake recovery on borrowed time and money. Once again, we have another FED induced bubble. When this one finally ends, it will be the mother of all recessions. That will force the FED to reverse course and print like there’s no tomorrow. At some point during this new massive QE, the dollar will not be able to take the pressure, foreigners will get rid of dollars, it will no longer be the reserve currency of the world, and massive inflation within the US will be the end result. Beyond that the crystal ball gets hazy, but you had better be prepared for a new world monetary system, because it’s coming.”

    My question again is, if the “mother of all recessions” is coming, why buy now? If the recession does not come the FED raises rates and the chance of your inflation falls dramatically.

      • Yes DJ, it can also be sunny while raining at the same time. You also said last week-
        “The economy will crash, the fed will print, gold will soar.”

        Do you expect prices to rise as the economy “crashes” during the “mother of all recessions?”

          • In order for the FED to start QE again and dramatically Increase the size and scope will significant asset deflation. Mainly housing again. If you’re correct and housing doubles, the Fed will increase rates aggressively going forward. So, you can’t have it both ways. Aggressive tightening will not lead to asset appreciation.

          • There are a couple of scenarios that could play out:

            Scenario 1) The printing that has already occurred finds its way off the bank balance sheets and into consumer borrowing and spending, causing 1970s style inflation in the 10-12% range.

            Scenario 2) An even larger recession than 2008 occurs, forcing the FED to reverse course and print massively, causing a complete loss of confidence in the dollar and hyperinflation in excess of 50% annually.

          • Every civilization in history who has tried to print their way to prosperity has printed to infinity. Is the US somehow immune to basic laws of economics or math?

          • Japan seems to be immune. They have a debt to GDP ratio of over 260%(US 107%), the BOJ buys 70% of all their outstanding debt, they spend 25% of total tax revenue on debt service and Abe still can’t achieve his 2% inflation target.

          • Correct, it’s not working and BOJ will eventually print to infinity. A stable dollar is what has allowed them to last so long.

          • I don’t know what you consider to be “infinity”, but when you need to make up a word like Quadrillion (1,000,000,000,000,000) or 10 to the 15th power you must be close. Well the BOJ’s balance sheet just topped 1 Quadrillion and believe it or not, no inflation…. No hording of goods… No empty shelves…. No civil unrest or rioting in the streets… No wheelbarrow full of yen…. Just life as usual.

          • Like I said it hasn’t yet due to the stability of the dollar. Infinity means the currency is essentially worthless. Happens over and over throughout history. Happened in the US once already, google “not worth a continental”

          • No, infinity refers to dilution of the monetary base. “Worthless” money is a cause of dilution. In Japan, there is very little correlation let alone any causation that “printing” money has to lead to inflation. Again, if going from zero to 1 quadrillion has not created inflation, you might have to rethink your thesis. Why do you believe the dollar is saving Japa? Please explain.

          • I don’t need to explain, but I will be proven correct. I’m sure you’ll come up with some other explanation for why real estate prices have quadrupled when they do. What is your explanation for the doubling of multifamily prices during the past 5 years?

  5. DJ, What empires are you always referring to? The Empire of Weimer Germany after being defeated in WWI? The Empire of war torn Hungary in 1946? The empire of Zimbabwe 2008 in the middle of the Congo War? The Empire of 1980s Argentina? The Empire of 1970s Chile? The Empire of 1987 Nicaragua? The Empire of Greece in 1946 after WW2? The Empire of 1997 Yugoslavia? The Roman Empire 345 AD? Yes, they had inflation, but they also had barbarian at the gates. That war took down the empire, not inflation.

    • A new world monetary system is coming. It could be tied to Bitcoins, Gold, Commodities, who’s knows exactly how it will unfold, but I can guarantee that the fiat dollar system will not exist as the world reserve currency within the decade. Inflation is one of the most obvious outcomes.

      • DJ-Why is Bitcoin any different that an fiat currency? It has zero utility other than a store of virtual store of value(I use “value” very loosely when talking about Bitcoin.)

      • I don’t know why you think the dollar will crash. It is backed by the full faith and credit of the USA. Do you have any clue how vast the asset base of the US Govt is? Who do you think own all the land where all the oil reserves reside? I know, it’s the US Govt. Exxon leases the land. Have you ever driven down PCH 1 in California? I have, it’s beautiful and most of the beach front land is owned by the AS Govt. How much do you think Yellowstone Park is worth? The reason the dollar will never crash is other people who buy debt share my views. That why they are willing to loan the US Govt money for 10 year at 2.35%. If you don’t see it, by all means put your faith in Bitcoins.

          • Never said I like bitcoin. People make silly decisions all the time, like putting their faith in fiat currency. If you think Americas resources will somehow save the dollar, your kidding yourself. They are NOT linked to the dollar. Do you have any idea how anxious china, Russia, and India are to end their dependence on the dollar? That’s half the world right there. The dollar WILL go back to a real asset based system or it WILL fail, that is plain fact, when it fails depends on how reckless Washington is. Have any clue why US bonds were downgraded for the first time in history?

          • The dollar is backed by real assets, look at the US Govt balance sheet. I don’t understand why you can’t see it.

            China, Russia and India are so anxious to end their dependence they show up at every at Treasury action and roll over there bond/bills almost daily.

          • DJ- Even if dollars are backed by gold you are still putting the exact same faith in the US Govt. If one day the you show up at Fort Knox to exchange your paper money for gold and they say no, your recourse is to go to court and sue. This is the same is true now. Just ask Argentina, when a international court allowed a US hedge fund to seize a warship in Ghana. Do you not think the Supreme Court would not enforce the Full Faith and Credit Clause of the Constitution? Russia, China, India and Aunt Millie will get paid. If they don’t enforce the constitution, good luck getting your gold.

          • Well, I guess I will continue using dollars until my kid’s doctor decided to accept chickens and homemade pies as payment for their services.

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