DMAR Real Estate Market Trends Report | JAN. '20
Housing conditions in 2019, including scarce inventory and record-breaking prices, position metro Denver as a seller’s market going into the new year.
This 2019 year-end report analyzes trends that indicate 2020 has started off as a seller’s market.
“Inventory continued to be scarce in 2019,” said Jill Schafer, Chair of the DMAR Market Trends Committee and Metro Denver REALTOR®. 2019 ended with 5,037 active listings, down 9.68 percent from 2018; representing 41 percent of metro Denver’s 30-year annual average of 12,262 active listings.
For historical perspective, active listings reached their highest point in July 2006 with 31,989 listings. During that period of record highs, months of inventory stood at 6.6 months which implied a robust homebuyer’s market. The record-low month was in December 2017 with 3,854 listings. A year later, that number increased 44.7 percent to 5,577. This growth in housing inventory was due in part to sluggish sales and a higher number of new listings entering the market. According to the numbers, this trend started to reverse itself toward the midpoint of 2019 with November representing the first month in the previous 13 that showed a decrease in listings compared to the previous year.
“The Denver metro area saw a significant increase in homes for sale in 2018, up 44.71 percent from 2017,” adds Schafer. “That prompted talk of recession and fears of another housing crash. But at the end of 2019, that pile of inventory shrunk. The main reason we saw fewer choices was not because more were going under contract or selling, but because nearly 30 percent fewer new listings came on the market in December compared to the month prior.”
According to Schafer, considering the average rate of home sales, it would take only 1.13 months to sell all single-family homes and 1.37 months to sell all condos in the Denver area. She states, “For perspective, at a peak in January 2010 we had 9.8 months of attached (condo) home inventory and 8.4 months of detached (single-family) homes. Anything under four months means sellers have the power in negotiations, while more than five months means buyers have control. We have started 2020 with sellers firmly in control.”
2019 also established a new historical high and marked the eighth consecutive year of price gains. In 2019 the average home price was $486,695 and the median home price was $420,000, up 2.85 percent and 2.46 percent respectively compared to 2018.
“Despite more price reductions, home values continued to go up in 2019,” comments Schafer. “Not at 8-9 percent like we saw earlier in the 2010’s, but up nonetheless. If you take a longer look back to get more perspective, you’ll see what a fabulous investment real estate is in the Denver metro area. The average residential close price increased 87.82 percent from 2010 when it was only $259,084.”
According to DMAR, over the last 30 years the average home price in metro Denver has increased a staggering 417 percent. “Growth has been consistent since 1990 except during the mortgage market collapse from 2007-2009,” said Steve Danyliw, DMAR Market Trends Committee member and Metro Denver Realtor®. “This was the only time where year-over-year home prices dropped. The good news: our recovery has been one of the strongest in the nation. Our pre-recession high was 2006 at $288,916. Since that time, home prices have increased 68.6 percent. That increase is one of the highest price recoveries in the nation.”
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999). In 2019, 2,421 homes sold and closed for $1 million or greater, up nearly 12 percent from 2018. The closed dollar volume in the luxury segment was $3.74 billion, up 13.46 percent compared to 2018.
The highest-priced single-family home that sold in December was the highest-priced home sale historically on record in metro Denver at $11,625,000, representing six bedrooms, 11 bathrooms and 15,473 above ground square feet in Englewood. The highest-priced condo sale in December was $2,250,000 representing four bedrooms, four bathrooms and 3,152 above ground square feet in Denver. The Realtors® representing the buyers and sellers in both transactions are DMAR members. Notably, the highest-priced condo sale in 2019 was in January at $10,750,000 representing three bedrooms, five bathrooms and 6,295 above ground square feet in Denver.
The Luxury Market was the only housing segment to see a year-over-year decrease in average and median days on market. Homes priced $1 million and up saw a decrease in average days on market from 68 in 2018 to 60 in 2019, down 11.76 percent, and has notably been decreasing since 2015 when it stood at 87 days.
“Overall, the Luxury Market has 4.06 months of inventory for single-family homes and 2.26 for condos - that’s more than any other housing price segment,” stated Taylor Wilson, DMAR Market Trends Committee member and Metro Denver REALTOR®. “That kept the list-price-to-sales-price ratio around where it has been since 2015 when it was 96.87 percent at its lowest, compared to 97.31 percent at its current and highest.”
2019 had a staggering 56.52 percent increase in the sale of luxury condos priced $1 million and over compared to the previous year, from 184 to 288. According to Wilson, “This is no doubt a result of the many infill developments of $1 million-plus duplex and multi-unit projects; however, single-family homes still make up 88 percent of the sales for homes priced over $1 million.”
Furthermore, in 2019, condos spent an average of 12 fewer days on the market compared to that of single-family homes, though the average sales prices were close.
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