DMAR Real Estate Market Trends Report | APR. '15
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Offers Above List Price and Waived Inspection and Appraisal Contingencies Contributing to Rapid Appreciation of Metro Denver Housing Prices
April’s Market Trends Report examines the rapid appreciation of Denver housing prices in a market without enough supply for the demand. Detached single family homes sold year to date reflect this appreciation: 10% less units have been sold under $500,000 while 34% more units have been sold above $500,00. Said Anthony Rael, Chair of the DMAR Market Trends Committee:
“This demonstration of ‘the mix’ – more units in higher price ranges selling than the lower range – affects the average price of sold homes.”
According to the report, the inventory of available homes (single family and condos) for sale is 4,112 at March month-end. 5,823 homes came onto the market, 5,139 were placed under contract, and 3,904 homes closed at a median sold price of $315,000 and an average sold price of $358,327. The resulting closed dollar volume in April was $1,398,906,749. Rael observed:
"Buyers run from listing to listing, trying to avoid being eaten by the competition. It’s certainly a challenging task since buyers must also avoid being trapped in a corner where they feel desperate to write offers well above list price, or opt to waive inspection and appraisal contingencies in order to compete."
This narrative is becoming common across the Denver metro area as inventory tries to replenish itself in order to keep up with the strong buyer demand. According to Rael, a common theme for the Denver area is buyers writing offers above list price–sometimes as much as $10,000 to $50,000 over. Some buyers are even waiving appraisal contingencies, which are partially contributing to the rapid appreciation in some areas.
DMAR’s 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) and “Premier Market Report” (properties sold between $500,000 and $749,999). 67 homes closed in March for $1 million or greater and the closed dollar volume last month in this segment was $96,114,783. Both pieces of data reflect a 29% increase year over year respectively.
The Premier Market took the biggest jump in March, with 44% of its inventory sold. Nicole Rufener, member of the DMAR Market Trends Committee, stated:
“Inventory below $500,000 is so tight that people have to move up in price to get something, and now this higher price range is getting tighter."
The people who are going to do the best in this market are sellers who have a home valued less than $500,000 and are planning on moving up to a home worth more than $750,000. They’ll sell in the fastest moving segment of the market and buy in one that isn’t nearly as aggressive.”
The highest priced home sale in March went for $4,115,000 in Englewood, with five bedrooms, eight bathrooms and 5,850 above ground square feet. The highest priced condo was in Riverfront Park, priced $1,600,000 with three bedrooms, three bathrooms and 3,724 square feet.
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