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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!