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Thursday, December 22, 2016

The Latest Trends in Denver Home Prices

How have home prices changed over the course of 2016? We’ll go over the numbers for single-family homes, townhomes, and condos today.  

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How have Denver home prices changed in 2016? 

If you look at traditional homes with yards that don’t share a wall with a neighbor, the average price is $443,000. That is a 9% increase in value for 2016, which falls into the same trends we have seen over the past couple of years, where homes appreciated by 8% to 12%. 

What does this mean to you as a homeowner? If you bought a house back in January for $400,000 and put the home on the market today, that home would now be worth $436,000. That is $36,000 of appreciation in one year! As you can see, owning a home in Denver is still a great investment. 

The townhome and condo market is very similar to the traditional home market, but they are not identical. The first difference is the price point. Townhomes and condos typically cost less than a single-family home.

Now is a great time to invest in Denver real estate.

The average price in the townhome/condo market is $293,000, which is a 7% increase for 2016. In the past, this market only saw an appreciation rate of about 5%, so 7% is a bit of a jump. Part of the cause for this jump in appreciation is the fact that townhomes and condos are at such an attractive price point. 

If you purchased a townhome or condo in January for $250,000 and put it on the market now, it would currently be worth $267,000, which is a $17,000 increase in value. 

Ultimately, owning property in Denver is still a good investment. These numbers are averages, so if you have questions about your specific house, condo, or townhome, just give us a call. We would be happy to help you!

Friday, November 18, 2016

What Is Happening in the Denver Real Estate Market?

How is the Denver market doing? Now that the election is over, what will happen to interest rates? We have the answers in your November market update.

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Today we’re here with your November real estate market update. 

The number of detached single-family units for sale has decreased to 4,700, an 11% drop from the previous month. Attached single-family units are also down, dropping 8.5% to only 1,300 units for sale. 

On the other hand, the average sales price is up to $442,000 for detached single-family units and $288,000 for attached single-family units. 

There are 4,975 homes under contract right now. In order to reach a balanced market with six months of inventory, we need 29,000 active units. As you can see, we are incredibly short on inventory and demand is remarkably high. 

Interest rates will probably start to go up as early as December 2016.

Now, after the election, we got a ton of phone calls asking about rising interest rates. Many of the experts predict that we will start to see rates move up. We should see an initial rate hike in December, followed by another during the first quarter of 2017. There will probably be a few more rate increases next year as well. 

What does that mean to you? Keep this in mind: every 1% increase in interest rates means a 10% decrease in purchasing power for buyers. For example, let’s say you get approved for a mortgage with a 4% interest rate. Today, that means you can afford a $400,000 house. If rates go up to 5%, you would only be able to afford a $360,000 house. 

Interest rates are especially important if you’ve been considering buying or selling a home. You will have the best opportunity to capitalize on these historically low rates over the next six months. 

If you have any other questions about our current market or interest rates, give us a call or send us an email. We would be happy to help you!

Friday, October 21, 2016

What’s Going on in the Denver Real Estate Market?

In comparing the Denver market of 2016 with where it was a little less than a decade ago, we see that it’s done a complete 180. 

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Are we in a bubble here in the Denver real estate market?

It’s a question that seems to be on the minds of a lot of our clients lately. They’re constantly asking us whether they should buy a home or hold off until a later date. I don’t own a crystal ball, but I can give you a fact-based comparison between the market of August 2007—when we were at our absolute peak—and the market of August 2016 to help answer that question. I can also compare some numbers from both years as a whole to paint an even clearer picture.

In August 2007, there were 30,000 total active units. In August 2016, there were 5,200 units. That’s an 82% decline in active listings. As for closed transactions, there were 4,300 in August 2007 and 3,600 in August 2016. That’s a decline of about 14%.

When we look at the average days on market, the difference is truly magnified. In August 2007, there were 95 days on market. Over the entire year so far in 20016, we’ve only averaged 28 days on market. That’s a decline of 70%.

The number of active units and the number of closed transactions have both declined.

Another important statistic to look at is the number of transactions going under contract in seven days or less, or “quick closes.” In 2006, 8% of all transactions were quick closes. So far this year, 45% of all transactions have been quick closes. That’s an increase of 450%.

The last statistic I want to point to is the percentage of cash transactions. In 2007, that number was 10%. In 2016, that number has been 20%.

As you can see, the Denver market has done a complete 180 from where it was nearly a decade ago. The market of 2007 was fueled by bad credit whereas the market of today is being fueled by wealth.

If you have any questions about the Denver market or are interested in buying or selling, please don’t hesitate to email us or give us a call. We look forward to hearing from you!