- Two home reports released Thursday.
- One home report was from REcolorado, the other from DMAR.
- Both shows same trends as far as home inventory.
New Denver-area home listings soared 62 percent in January from December, an encouraging sign for a market that desperately needs homes to sell.
However, the inventory of unsold homes in January remained at historic lows, according to separate reports released on Thursday. The reports were released by REcolorado and the Denver Metro Association of Realtors.
“If we could magically double the current inventory, there’s no doubt the majority would be snapped up quickly,” said Anthony Rael, chairman of the Denver Metro Association of Realtors Market Trends Committee.
Both reports used REcolorado (formerly Metrolist) statistics, but used different methodologies for analyzing the data. REcolorado is the largest MLS in Colorado. Its reports includes data from REcolorado’s 16,000 members in the Denver area.
One striking statistic released by REcolorado showed that 3,964 active listings hit the market in January, a 61.8 percent spike from the 2,450 in December.
For seasonal reasons, new listings typically rise in January from December. And the latest increase was not a percentage gain record. For example, in January 2014, 4,116 new listings came on the market, compared with 2,379 in December 2013, a 73 percent gain. And in January 2014, 4,581 new listings came on the market, compared with 2,820 in December 2013, for almost a 62.5 percent gain.
Still, the most recent months-t0-month was an “impressive” gain, according to REcolorado. It also indicates sellers are getting a jump on the selling season. Savvy home sellers are taking advantage of what continues to be a prime seller’s market.
“An influx of new listings gave the metro Denver housing market some momentum as the new year began,” said Kirby Slunaker, president and CEO of REcolorado.
“With inventory levels remaining low and prices holding strong, the market continues to be competitive and fast-moving,” Slunaker continued.
“Now is a great time for sellers who have been waiting to put their home on the market,” Slunaker said.
Meanwhile, record low inventory levels continue to be the biggest problem facing the Denver-area housing market.
There were only 5,152 active home listings on the market in January, down 3.7 percent from the previous low of 5,352 homes in December, according to REcolorado. That is a 26.2 percent drop from the 6,981 active listings on the market in January 2014.
DMAR, which tracks an 11-county area, showed a similar trend with even fewer homes on the market. DMAR tracks the counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.
Overall, there was only a 2.05 month supply of unsold homes on the market at the end of January, according to DMAR.
There were 4,171 active listings on the market in January, a 33.77 percent drop from the 6,298 in January 2014 and a 4.23 percent dip from the 4,355 in December, according to DMAR.
For single family homes, there were 3,384 active listings last month, a 32.09 percent and a 4.86 percent drop from January 2014 and December, respectively.
Condos showed an even bigger percentage drop on a year-over-year basis.
There were 3,384 condos on the market last month, down 32.09 percent from the 4,983 in January 2014 and a 4.86 percent drop from the 3,557 in December.
“The Denver real estate market is feeling a bit ‘deflated’ due to the scarcity of available homes for sale and its inability to keep up with the abundance of demand from buyers,” Rael said.
“For the foreseeable future, the low inventory will continue to drive up prices,” Rael said.
The average price of a single-family home sold and closed in January was $371,899, an 11.3 percent increase from $303,119 in January 2014, but down 2 percent from the all-time record of $339,433 in December.
The median price of a single-family home in January was $285,00, a 14 percent jump from $250,000 in January 2014, and a fraction down from $286,000 in December.
REcolorado put the average price of a home at $329,141 in January, up 9.5 percent from $3300,529 in January 2014, but down 3 percent from $339,636 in December.
The median sales price of a home in January was $285,000, up 14.17 percent from $249,625 in January 2014, but flat from the $285,250 in December.
Year over year condo sales prices rose 15 percent to $236,736 and the median condo price soared 20 percent to $185,450, according to DMAR.
“Sellers are thrilled by the price appreciation, but are also feeling a bit of shock and awe as they seek a replacement property,” Rael said.
However, new homebuilders this year will likely offer more homes to help alleviate some of the shortage in the resales market, according to Rael.
“2015 should be a monster year for new home construction as buyers take comfort in knowing they have a property locked up – even if it takes 10 months to build,” Rael said.
REcolorado showed 2,497 sales last month, while DMAR showed 2,328.
“The biggest hurdle we have in this market is inventory,” Niederman said. “If we had more inventory, we would have more sales.”
One reason that buyer demand is so high is because interest rates are so low, he said. Conforming, 30-year, fixed-rate mortgages are still available below 4 percent for qualified buyers, he noted.
Denver’s strong economy and low unemployment rate also are contributing to the appetite for homes, he said.
“We have recently heard cases where homes that qualify for conforming loans immediately are having 30 to 40 showings and four to eight offers,” Niederman said. However, he cautioned that isn’t happening with every home, but with those that show well and are priced right.
At Kentwood, they have been brainstorming on how to convince more home owners to put their homes on the market, he said.
One thing they increasingly are offering is a clause in the sales contract that delays the closing until the seller can find a replacement home. The clause can be extended in 30-day increments. The sales contract can be terminated if a replacement home is not found.
“That takes a little bit of the pressure off the seller,” Niederman said. “One reason people are not putting their homes on the market is because they don’t want to make a double move. That is, they don’t want to sell their home, rent an apartment and then move again when they find a home.”
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 Co. and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.