Sales of homes fall in June, CAR reports.
Condo closings down 18%, CAR reports.
Condo listings down 21% in June from June 2015.
Denver-area home sale prices continued to climb to record highs in June, booking year-over-year double-digit gains, according to a report released on Wednesday.
However, the report by the Colorado Association of Realtors also showed that home sales fell as much or more than prices rose in June.
The shortage of homes, combined with strong demand, continued to drive up prices last month, according to Karen Levine, a member of CAR’s board.
Another factor resulting in the falling sales: greed.
“Sales are slowing because a lack of inventory,” Levine said. “Home closings are falling because we have nothing to sell. But the other factor is seller greed.”
She recently lost two listings because she thought the buyer was asking too much. The seller listed the home with another broker at $10,000 more than Levine thought it was worth. The owner of the home, priced in the mid-$500,000s,has since dropped the price by $25,000.
The owner of the other home, a fixer-upper on a great lot, has since dropped the price by $10,000.
The median price of all home sold last month was $360,000, a 10.8 percent increase from $325,000 in June 2015.
The average sales price of all homes sold in June was a record $417,374, up 12 percent from $3272,808 a year earlier.
At the same time, there were 5,798 home sales in June, down 10.8 percent from 6,520 in June 2015.
Towhome and condo closings plummeted by 17.9 percent.
There were 1,459 townhome and condo sales last month, compared with 1,777 in June 2015, CAR’s data shows.
Single-family sales, by contrast, fell half as much.
There were, 4,339 single-family closings last month, down 8.5 percent from 4,743 in June 2015.
In the first half of the year, single-family home sales were flat when compared with the first six months of 2015.
Year-to-date, there have been 20,195 single-family home closing, up 0.2 percent from the 20,161 sales in the first six months of last year.
In the first half of the year, there were 7,406 townhome and condo sales, down 3.6 percent from 7,683 during the same time period in 2015.
Sales likely slowed because a shortage of homes on the market.
There were only 1,578 active listings of townhomes and condos on the market in June, a 21.3 percent drop from 2,004 in June 2015.
Last month, buyers could make offers on 8,239 single-family homes on the market, 15.5 percent fewer than the 9,752 active listings available in June 2015.
There was a 1.7-month supply of single-family homes on the market last month a 15 percent drop from a 2-month supply in June 2015.
The supply of townhomes and condos plunged 26.7 percent to 1.1 months from 1.5.
It may be too early to say whether the drop in sales was a blip or a sign of things to come.
“I think it is going to lead to a healthy correction, which will be good for the market,” Levine said. “But it will take some time.”
An increasing number of buyers are sitting on the sidelines, rather than bidding up prices to levels that don’t make sense, she said.
Overpricing a home is not a good strategy, she said.
“I tell clients that if they want to maximize the equity they get when they sell, they need to price it realistically,” Levine said. “If the market decides that is too low, it will pull up the price.”
But when the seller comes out of the gate asking an outlandish price, a lot of potential buyers are reluctant to make a lower, counter-offer, according to Levine and other brokers.
Still, pending/under contracts, which portend future closings, were up 6.1 percent in June.
There were 6,463 contracts written for all homes last month, compared with 6,520 in June 2015.
Under contract activity is flat during the first half of the year.
Through June, 31,812 homes have been placed under contract, up 0.1 percent from 31,773 in the first half of 2015, CAR’s report shows.
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.