Madison Report Q2 by Madison & Company Properties

MADISON

Report Q2 2017 Real Estate Market Update

Q2 quarter 2 real estate market recap 2017

These stats are based on the following 11 Counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park County The 2nd quarter of 2017 has again proven to be an up and down ride for many buyers and sellers along the Front Range. In May, a recordbreaking 179 homes priced over $1 million sold and closed, up over 21% from the month prior and up nearly 38% from 2016. Higher end shoppers were confident in the product that was available and the financing terms it took to get a deal done. While that is good news for some, there are concerns in other segments as the year has progressed. On the other side, the competition for homes under $500,000 is fierce as this price segment is below one month of inventory. Considering this price range accounts for 74% of all sales in metro Denver, homebuyers should expect continued competition and difficulty closing on a home. According to data, only 41% of homes on the market are priced below $500,000, which leads to a simple, yet painful supply and demand issue. Traditionally, April, May, and June present the greatest number of homes to choose from and buyers rev up to take advantage of the opportunity. This year has

madison quarter 2 report

been a bit different in that the fever pitched spring market came early in February and March, and instead of a buildup there was a 1% reduction in months of inventory to a 5.8-month supply in May. The outcome, major frustration with buyers who were often paying well over the asking price just to have a chance to be chosen by the seller. In turn, many deals crashed before closing as that frustration boiled over into inspection and appraisal negotiations where buyers hoped to recoup some of the money they offered in the initial contract and sellers pushed back, knowing they had other buyers on the line who were ready to go.

peek into what we might expect over the next 12-24 months. By the numbers, 5,712 homes were sold in June in the Denver metro area, which is 5.81% ahead of last year and the total sales volume was $2.596 billion, up 8.66% year over year and 14.53% year to date compared to 2016. As buyers and sellers navigate the bumps and bruises of the market, education, and preparation for what each segment of the market means to them in particular is absolute. Each one presents its own challenge and opportunity that another may not. Real estate is local in more ways than just location and knowing the risk and reward in detail is how success will be had. Never before has knowing the data and what to do with it meant so much to oneâ&#x20AC;&#x2122;s success. Be sure to be as educated as you can.

Is there hope for a more balanced market and when might that come? Recent activity in the metro market gives optimism to homebuyers that our extreme sellerâ&#x20AC;&#x2122;s market may be showing some early signs of letting up. In fact, June brought with it 19.74% - Justin Knoll, President more inventory of homes from May. Madison & Company Properties We experienced gains in listing inventory, number of new listings and average and median sold prices as well, yet under contracts and homes sold experienced small declines. Q3 will be an interesting

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Economic Indicators residential building permits

h2.6%

Residential building permits in April 2017 recorded the second highest count since the data series began in 2013

unemployment

Down from 2016 YTD average of 3.5%

$396,100

27%

median home price (Denver-Aurora MSA)

companies hiring in denver area Companies expecting to add workers rose 2% from Q1 to Q2

YTD price 3.1% higher through Q1 2017

consumer confidence index

YTD average up 30.2% through May 2017

* Source: MetroDenver Economic Development Corporation

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residential - detached, single family

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11 county denver metro real estate stats

April • May • June Residential Detached, Single Family APR MAY JUN ACTIVE LISTINGS

YTD 2017 5,414 YTD 2016 5,453 YTD 2015 5,031

AVERAGE Days on Market

MEDIAN Sold Price

$420,000 $418,000 $425,000

TOTAL Active Homes

4,128

4,560

5,414

TOTAL Sold Homes

3,125

3,839

4,181

Average Sales Price

$477,098 Year To Date

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residential - attached, condominium

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11 county denver metro real estate stats

April • May • June Residential Attached, Condominium APR MAY JUN ACTIVE LISTINGS

YTD 2017 1,645

AVERAGE Days on Market

YTD 2016 1,343

MEDIAN Sold Price

$270,000 $270,000 $276,000

YTD 2015 1,166

TOTAL Active Homes

1,233

1,335

1,645

TOTAL Sold Homes

1,264

1,481

1,531

Average Sales Price

$314,137 Year To Date

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madison statistics Detached Single Family | 11 County Overview 7,000

Active

New Listings

Feb, ‘17

Mar, ‘17

Under Contract

Sold

6,000 5,000 4,000 3,000 2,000 1,000

Jun, ‘16

July, ‘16

Aug, ‘16

Sept, ‘16

Oct, ‘16

Nov, ‘16

Dec, ‘16

Jan, ‘17

Attached Single Family (Condo) | 11 County Overview Active

Apr, ‘17

New Listings

May, ‘17

Jun, ‘17

Under Contract

Sold

2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 Jun, ‘16

July, ‘16

Aug, ‘16

Sept, ‘16

Oct, ‘16

Nov, ‘16

Dec, ‘16

Jan, ‘17

Feb, ‘17

Mar, ‘17

Apr, ‘17

May, ‘17

Jun, ‘17

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madison statistics Days on the Market | Single Family vs Condo 55 Single Family

Condo

45 40 35 30 25 20 15 10 Jun, ‘16

July, ‘16

Aug, ‘16

Sept, ‘16 Oct, ‘16

Nov, ‘16

Dec, ‘16

Jan, ‘17

Feb, ‘17

Mar, ‘17

Apr, ‘17

May, ‘17

Jun, ‘17

Residential Sold Price | Average Sold vs. Median Sold Price Average Sold

Median Sold

$550,000 $500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 June ‘16

July, ‘16

Aug, ‘16

Sept, ‘16

Oct, ‘16

Nov, ‘16

Dec, ‘16

Jan, ‘17

Feb, ‘17

Mar, ‘17

Apr, ‘17

May, ‘17

Jun, ‘17

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madison statistics Month End Active Listings vs Month End Sold Listings

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Congrats justin, new Colorado association of realtors

chairman of the board! “When you come from a family of real estate agents, with three generations of Realtors® before you, the values of a Realtor® are instilled at so young an age they are second-nature. There is a built-in passion for real estate. Long hours of serving clients, mentoring and teaching peers, and volunteering on behalf of Realtors® and home-ownership are just a part of what goes into being a caring and dedicated real estate agent who gives back. As young kids we were taught to live in your passion and help make it better than it was before. For me, being deeply involved with the Colorado Association of Realtors and representing my peers in any capacity I can is what helps fill my cup in life. Recently I was elected at the next Chairman of the 25,000+ member Association and the hard work begins this November when I take the reins for a year as the Chairman Elect. The following November will begin my term as the Chairman of the Board, where I will spend my time guiding the Board of Directors through challenging issues in our industry while making sure that every member knows what the value of their membership means to them and their clients. As Realtors® we adhere to a higher level of ethics than anyone in real estate. We take an oath to work by a Code of Ethics and we agree to resolve issues collaboratively rather than through the court system whenever possible. We fight for the rights of private property ownership and we lobby on behalf of the millions of homeowners in the US who still believe that owning a home is a key tenant of the American Dream. When I set out on this path I would never have dreamed of meeting with our elected officials in the halls of Congress to tell the story of homeowners and the struggles home ownership brings for many of our peers. From protecting mortgage interest deductions to flood insurance costs and coverage, to insuring that affordable housing is not just a wish but a reality, this is what we work for and why I wake up excited to tell these stories and create energy around making lives better. That is my commitment as the new CAR Chairman Elect and will remain my commitment when I begin the role of CAR Chairman of the Board. Luckily, because of the team we have at Madison & Company Properties, this new endeavor will not effect my position as president of the company. Our staff and leadership are set up to ensure that nothing is missed on our end and I am forever grateful to have such an amazing team to work with. We are continually dedicated to becoming better at what we do, and my new role with CAR is an exciting opportunity to further enhance the services we offer to our clients and our company. Thank you for being part of this amazing journey, I can’t wait to see what comes next! - Justin

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to pay or not to pay... off your mortgage early There's plenty of debate in the wonderful world of real estate and home ownership about whether it is better to use expendable income to pay off a mortgage early or invest. Ultimately, there is no one answer! Everyone is different, and you have to find the right answer for you and your personal financial situation. We want to provide you with some of the pros and cons of paying off a mortgage early.

how to pay off your mortgage early • Pay a little extra each month. Any payments made over the minimum payment go to your principal on the loan, instead of towards the interest. Over time you can significantly reduce the amount owed and cut down the time of loan repayment, even by years (see graph). • Refinance to lower interest rate or shorter-term loan. Both options lower the total interest you are paying, either due to the lower rate (if you don’t already have a low interest rate) or the shorter amount of time for the interest to build. This allows you to save money long-term, either through reduced monthly payments because of the lower interest rate or by paying the loan off faster. • Downsizing. If getting rid of your mortgage faster, or altogether, is important, downsizing can be a great way to get there. Selling your house and using the profits to purchase a smaller home could mean having no mortage at all, or at least a smaller one. Using the same monthly payment as before you could be debt-free faster.

the pros • Save money! Interest builds up, especially over the course of a 30-year loan. Paying off your mortgage early can save tens of thousands of dollars on built-up interest. • Return on investment. When you put your dollars towards your home, you know exactly what your return on investment will be. Real estate, the stock market, and the economy are ever-changing and investing in your home is a comforting way to be sure that your money is going to the right place. • Reduced cost of living. Mortgage payments take up a big part of one’s take-home paycheck. Getting your mortgage paid off faster allows for a lower cost of living. This can create more financial freedom, allowing you to save money, which can then be put into retirement, kids’ college funds, travel, and more. It could also give you the chance to work fewer hours, or even work a job you always wanted but previously couldn’t afford the paycut.

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the cons • Lose the tax break. Mortgage interest paid throughout a year can be listed as a deduction on your taxes if you itemize. Taxes are complicated, so it’s important to talk to an accountant or tax specialist while figuring out if the tax deduction is worth keeping the longer loan. • Lost diversification. From Todd Tresidder, a financial mentor, “this one is ‘the biggie’ so pay close attention… Most investor portfolios are denominated in their domestic currency and thus carry the risk that inflationary government policies will depreciate their investment purchasing power over time. A residential real estate mortgage is the only practical way for most people to short their domestic currency and hedge against inflationary economic policy.” • Life happens. There are times when extra income could be better spent on investments, retirement, a more comprehensive healthcare plan, college funds, and more. For many Americans, medical bills are the primary cause of bankruptcy and investing in a better healthcare plan could be a wiser financial decision over paying off a mortgage faster. In some cases, insurance could be a more financially sercure option than a paid-off mortgage. • Investments. Many hold the opinion that it is better, from a long-term perspective, to put extra income into investments rather than higher mortgage payments. Saving for retirement, investing in stocks, and having a diverse investment portfolio are things that can, over time, bring you even greater financial freedom and stability.

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