April home prices set record

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By John Rebchook

The average sales price of a single-family, detached home in April for the first time topped $400,000. Source: REcolorado.

The average sales price of a single-family, detached home in April for the first time topped $400,000. Source: REcolorado.

The average price of a single-family home sold in the Denver area in April eclipsed $400,000 for the first time ever.

The average price of a single-family, detached home closed in April was a record $402,302, according to a report released by REcolorado on Tuesday. A separate report by the Denver Metro Association of Realtors put the average price of a single-family house even higher at $404,206, 11.55 percent higher than the $362,368 average price of a home closed in April 2014.

Both reports show that despite a big jump in the number of homes for sale in April, home prices are continuing more than a three-year trend of rising prices.

Record home prices are being fueled by strong demand at a time market continued a trend of a still near record low inventory of unsold homes.

At the same time, there was a big jump in new listings added to the market in April from March.

“Improved inventory expanded choices for consumers in April, bringing more buyers to the market and contributing to positive sales,” said Kirby Slunaker, president and CEO of REcolorado, the largest MLS in the state.

Homes hitting the market in April, however, were snapped up quickly.

“Consumers continue to come to the market ready to purchase newly-listed homes before the supply is replenished, keeping inventory levels at record lows,” Slunaker continued.

“At this time, the supply in the Denver area is just six weeks.,” Slunaker added.

DMAR show the same trend, with an unsold inventory of 5.6 weeks for single-family homes in April and a 3.3 week of unsold condos on the market in April.

The average sale price of a single-family, detached home topped $400,000 for the first time in April. The average sold price of all homes of $361,953, also was a record. Source: REcolorado

The average sale price of a single-family, detached home topped $400,000 for the first time in April. The average sold price of all homes of $361,953, also was a record. Source: REcolorado

The number of homes for sale in the Denver area jumped 22 percent in April from March, according to DMAR, which has 5,000 members.

REcolorado showed a 19 percent month-over-month increase in active listings.

The trends from the two groups are similar, but the numbers are different because they track the market in different ways.

The 5,025 homes on the market last month is still 20.3 percent down from the 6,305 home on the market in April 2014, according to DMAR.

REcolorado, showed a 15.4 percent drop in active listings, with 6,149 unsold homes on the market in April, compared with 7,266 in April 2014.

REcolorado showed 7,566 new homes came on the market in April, an 8.2 percent increase from 6,992 in April 2014 and a 21.1 percent jump from 6,247 in March.

DMAR showed 7,059 new listings added to the market in April, 8.1 percent more than the 6,529 listings that came on the market in April 2014.

A historical look at home inventory from March 2014 to April. Source: REcolorado.

A historical look at home inventory from March 2014 to April. Source: REcolorado.

Given the low supply and strong demand, home prices in the metro area have been edging up for 38 months, with each month bringing a new record, according to DMAR.

April was no exception.

The average sold price for all homes was $361,915 in April, topping March’s record of $356,3267, according to DMAR.

The median price, however, was unchanged, at $315,00, for all homes, according to DMAR. The median price of single-family, detached homes, however, rose to a record $350,000 in April, topping the previous record of $345,000, set in March, according to DMAR. April’s median value for single-family homes was 14 percent higher than in April 2014, when the median price stood at $307,000, according to DMAR.

The average price was up 10.5 percent from $327,339 in April 2014. The median price last month was up 9 percent from $275,000 in April 2014.

Separately, the latest Case-Shiller report showed that Denver for the first time, showed the biggest year-over-year percentage gain in the 20 major markets tracked in the closely followed index.

The average price of a single-family home set a record in April, topping $400,000 for the first time. Source: Denver Metro Association of Realtors.

The average price of a single-family home set a record in April, topping $400,000 for the first time. Source: Denver Metro Association of Realtors.

“Today’s higher prices have been expected as the economy improves and the first-time and boomerang buyers return to the market,” said Anthony Rael, chairman of DMAR’s Market Trends Committee.

“While demand outpaces supply, there is no indication that a housing bubble is on the horizon,” Rael added.

Homes priced below $300,000 have been “blistering hot,” Rael said.

That has led to an unprecedented development regarding how some homes are being marketed and sold.

“As pent-up demand for housing in this price range continues to outpace inventory of available homes, the term ‘seller protection’ has made its way into the vocabulary,” Rael said

Seller protection contractually obligates a homebuyer to pay the difference between the appraised value of a home versus the contract price – thus protecting the seller.

“This strategy has become an unwelcome thorn in the backsides of real estate agents and their buyers, and not one I advocate,” Rael continued.

“Homebuyers motivated enough, and who have the financial means, are writing offers significantly above the list price and opting to waive the appraisal contingency, he said.

DMAR report shows the median price of a single-family home sold in April hist a record $350,000.

DMAR report shows the median price of a single-family home sold in April hist a record $350,000.

However, many of them were quickly snapped up.

There were 5,605 homes placed under contract in April, 9.2 percent more than the 5,134 placed under contract in April 2014, according to DMAR.

REcolorado showed 7,103 homes placed under contract in April, up 7.45 percent from 6,610 in March, but flat from the 7,014 in April 2014.

The 4,465 closings last month represented a 2.9 percent increase from the 4,340 in April 2014, according to DMAR.

REcolorado, however, reported 4,416 closings in April, down 7.8 percent from 4,798 in April 2014 and a 6.7 percent increase from 4,140 in March.

The total dollar volume in homes sold hit $1.62 billion in April, a 14 percent increase from $1.42 billion in April 2014, according to DMAR.

A snapshot of housing activity in the Denver metro area, through April. Source: DMAR.

A snapshot of the Denver area housing market, through April. Source: DMAR.

 

The luxury housing market, meanwhile, continues to be strong.

Seventy homes closed in April 2015 for $1 million or greater for a total of $106.7 million in dollar volume April.

“In past months, the news has been about the properties priced under $400,000 selling at the speed of light,” said Jill Schafer, member of the DMAR’s Market Trends Committee.

“Now all homes under $1 million are selling fast,” she said.

In April, there was only a little more than two months of single family inventory priced between $500,000-$749,999 and about four months between $750,000-$999,999.

The condo market had a little more than three months of inventory in the Premiere market, which are homes priced between $500,000 and $749,999. There was 3.67-month supply of condos in the Signature market, which are homes priced between $750,000 and $999,999.

That means the seller is firmly at an advantage in these price ranges, according to DMAR.

The number of Premiere home sales increased 5.56 percent in April compared to March.

Year over year, single family homes sold in this price range increased 37 percent and condo sales increased a notable 71 percent.

“It doesn’t stop there,” Schafer said.

“Move up a price range and it’s growing stronger and stronger,” Schafer said.

The number of homes sold in the Signature Market is nearly 15 percent higher in April than in March,” she continued.

“Year to date, we saw nearly 54 percent more homes sold,” she added.

“Meanwhile, sellers in this price range are selling an average of a couple of weeks faster. That means buyers looking at homes in this price range, will have to move quickly, as well as bring their highest and best offers from the beginning,” according to Schafer.

Things down shift when the price goes over $1 million.

Luxury homebuyers, those paying $1 million or more, found themselves with more power over sellers in April. There was 11.5 months of inventory in the single-family home market and 6.8 months inventory of condos for Luxury homes.

That may not last for long.

The number of sales in this price range was down from March to April, but still up 21 percent compared to this time last year.

The most expensive home sale in April was a 5,193-square-foot condo in the Four Seasons in downtown Denver.

The four-bedroom, five-bathroom condo is 5,193 feet, or not quite a mile high, above ground.

The DMAR report covers the 11 counties of

Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.

REcolorado, by contrast, bases its numbers on homes sold by its members.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by 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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