According to a recent article published by the Denver Post, the housing market in the Denver area had a record year in 2015. However, things were slowing down in the final months of the year, and some buyers and sellers are expressing concern. Here is what everyone should know about how Denver ranks in the country’s real estate market.
A Record-Breaking 2015
In 2015 alone, there were 55,059 home sales that took place, and the total value of these sales was a record-setting $20.16 billion. $16 billion was spent on single-family homes, ranging from small starter homes to luxury homes, and the other $4.16 billion was spent on condos and townhouses in the metro area. This is all despite the fact that October, November, and December saw a stall in home sales that frightened many sellers.
Why the Sudden Change?
There is certainly no lack of buyers in the Denver area; the reason for the sudden stall in home sales has to do with a lack of inventory. From November to December 2015, the number of homes on the market dropped sharply to 4,384, a decline of nearly 23%. While a drop in inventory normally causes homes to sell more quickly due to real estate supply and demand, the average number of days that homes spent on the market in December rose to 40. The month before, homes spent an average of 36 days on the market.
Although the lack of homes on the market and the number of days they spend on the market waiting for buyers may be a bit concerning for sellers, there are a few other statistics to note. Home prices remained the same in the last three months of 2015, despite the stall in sales. They only rose 3.3% to an average price of $374,900. However, over the course of the entire year, the average price of all homes went up by 10.65%, making Denver one of the best markets in the country for home appreciation.
The End of 2015 Was a Buyer’s Market
According to a report from the Denver Metro Association of Realtors in early January of this year, the last few months of 2015, especially December, proved to be especially profitable for buyers. They were able to take advantage of previously overpriced listings that were not selling by presenting sellers with offers that had no competition. As such, buyers in the last quarter of 2015 stand to gain the most in terms of appreciation, particularly if sales pick up again in 2016.
The Future of 2016 Denver Real Estate
Inventory may continue to be an issue into 2016, and the luxury home market in the Denver area is especially tight due to the current lack of choices. In the executive home market in early 2016, it is and will likely continue to be a seller’s market. However, experts still believe that a dramatic shift in nowhere in the city’s future and that Denver will instead see a balancing trend over the course of the next several months.
While there is certainly no denying that home sales stalled in the last months of 2015, experts like Anthony Rael, chairman of the DMAR Market Trends Committee, says that the Denver metro area is still the number one real estate market in the country.