Be patient in arriving at conclusions about the direction of the Denver real estate market. What remains to be seen is whether Denver slows in appreciation with continued national job loss, election year, economic questions, forbearance and societal disruption. Or, is Denver the tip of the spear, leading the local and national economies out of a period of hibernation?
Some think there will be a decline in value, others believe we will see another 4-6% appreciation in home value by year end. So many factors influence this outcome that we believe it irresponsible to try and predict, at the moment.
For now, sellers are well positioned to see continued gains in home value and should be aggressive in pricing their homes for sale.
Buyers should be aggressive to get the home they want and capitalize on historic interest rates. A $500,000 mortgage at 5.25% interest rate costs $493,967 in interest over the life of the loan. A $500,000 mortgage at 3% interest rate costs $258,887 in interest over the same 30 years. This is a $235,080 difference. Buyers would do well to keep this in mind as they are considering price ranges and negotiating offers.
1,674 homes went under contract last week, 38.1% higher than the last 3-year average. New homes listed for sale is right at the 3-year average and home showings per property and total showings are both higher than 2019 numbers.
Buyer and seller activity are extremely strong and there are a couple things we can anticipate, at least in the short term; 1) homeowners will continue to see aggressive appreciation over the coming months with low inventory and very strong demand, 2) sellers will likely see a high volume of showings and multiple offers and buyers will be in competitive bid situations demanding strong preapprovals from lenders and very well written offers in order to be the winning party.
NOTE: Some geographic areas and price ranges are responding differently to the current market conditions. Contact me if you want specifics for any of your properties.
- More than 25,000 showings occurred last week which equates to an average of 4.8 showings per property over the 7 day period.
- Showing by price range is important for both buyers and sellers to understand.
- Homes priced between $250,000 and $499,999 saw 6.4 showings per property
- Homes priced between $750,000 and $999,999 saw 3.2 showings
- Homes priced between $1mm and $1.249mm saw 2.25 showings on average last week.
- The number of showings required to get a contract has increased from a low of 2 in week 16 of this year, to 15 showings last week. However, it should be noted that anecdotally, we believe the additional showings are contributing to multiple offers and driving sale prices higher.
- Showings per contract by price range indicates expected days on market.
- Price range of $250,000 to $499,999 took 15.56 showings to go under contract, but on average less than 2.5 weeks.
- Homes priced between $750,000 and $999,999 took 15.39 showings to go under contract and 4.8 weeks on average.
- Homes priced between $1mm and $1.249mm took 11.03 showings to go under contract and 4.9 weeks.
- Inventory of homes available is down 21.8% compared to the same time last year with 6,386 homes for sale. This represents 1.17 months of inventory; decidedly a sellers market.
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