Denver Residential RealHighlights Estate Annual Report of 2014 & Predictions of 2015
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proudly presented by:
TIM HOYMAN
THE MOZART OF REAL ESTATE 303-669-2676 tim@timhoyman.com www.TimHoyman.com
EXPER IE N CE IS N O T EX P EN S I VE, I T S P R I C EL ES S.
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The Denver 100?
The Denver 100 is a locally owned and operated independent real estate company that has developed into an innovative, creative and recognizable force in Colorado real estate circles. The boutique broker centric service model of this company was designed with the consumer in mind. The Denver 100 has been built through the eyes of producing real estate professionals to service high value clients throughout the Denver Metro Area. • Experience and skills are key components to fulfill the consumer needs in the purchase or sale of their homes. • The Denver 100 proudly boasts that the average broker experience in our company is 12.5 years of real estate experience per broker. The Average Broker Associate at The Denver 100 completes 3 times as many transactions per year than the average Denver real estate agent.
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Dear Friends of The Denver 100: The Denver 100 provides this Annual Real Estate Report as a service to our clientele to give the current trends in the Denver residential real estate market and a resource to predict the future housing direction in our marketplace.
Residential Real Estate Report DENVER METRO AREA SINGLE FAMILY HOUSING • 56,407 single family and condominiums sold in 2014 compared to 55,741 that sold in 2013 or a 1% increase in the number of homes closed. • At Year End 2014 there were 5352 active single family homes for sale compared to the beginning of 2014 which had 7347 a decrease of 27% increase in inventory over last year. • The average price of a single family home in the Denver Metro Area ending 2014 is $360,335 compared to $332,663 ending 2013 year, which is a 8% increase in price for the mix of properties sold. By comparison, 2006 had a single family average price in Denver of $317,112. • The average days on the market for 2014 is 35 compared to 48 one year ago. • The selling price obtained compared to List price is 99.2%. What this means is that buyers were willing to pay full price or more to buy a home in 2014. • The absorption rate for single family homes in the Denver Metro Area with 2014 yearend inventories is 1.14 months. As the inventory decreases so does the absorption rate. This inventory month supply will rise during the spring and summer seasons. • The $250,000 to $500,000 price range had the most single family home sales with 23,135 homes closed in 2014 creating an absorption rate of 24 days of inventory. Below 6 months of inventory typically indicates prices will increase. • Conversely the $1 million and above price range had a total of 1045 homes closed in 2014 creating a current absorption rate of 8.12 months of supply. This is a decrease of 20% from 12 months ago, but still a higher supply of homes to stabilize prices.
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Market Overview Key market metrics for the current month and year-to-date. Residential Listings Only – Single-Family and Condo.
Key Metrics
Historical Sparklines
Active Listings 12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
12-2011
12-2012
12-2013
12-2014
Under Contract Listings
New Listings
g Sold Listings
Total Days on Market
Median Sold Price*
Average Sold Price*
Percent of Sold Price to List Price*
12-2013
12-2014
+/–
Last Year YTD
This Year YTD
+/–
7,347
5,352
- 27.2%
--
--
--
3,334
3,515
+ 5.4%
67,508
70,612
+ 4.6%
2,427
2,450
+ 0.9%
66,872
65,714
- 1.7%
, 3,886
, 3,983
+ 2.5%
, 55,741
, 56,407
+ 1.2%
55
39
- 28.7%
48
35
- 26.8%
$251,700
$285,250
+ 13.3%
$254,000
$274,900
+ 8.2%
$305,775
$339,636
+ 11.1%
$305,048
$324,282
+ 6.3%
98.3%
98.9%
+ 0.6%
99.0%
99.2%
+ 0.2%
* Does not account for seller concessions and/or down payment assistance. All data from REcolorado®. REcolorado® is a registered trademark of REcolorado © 2014 REcolorado. All rights reserved. | Powered by 10K. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado®. | 2
Active Listings The number of homes that were in "active" status at the end of the month.
December 8,263
7,347 5,352
2012
-11.1%
-27.2%
2013
2014
Historical Active Listing Count 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado®. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado®.
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Under Contract Listings A count of the properties on which offers have been accepted in a given month.
December
Year To Date (YTD) 3,334
3,037
3,515
70,612
67,508 55,156
+9.8%
+5.4%
2013
2014
2012
2012
+22.4%
+4.6%
2013
2014
Historical Under Contract Count 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
Note: The method used to calculate the "Under Contract" metric was updated in August 2012 so comparisons to previously reported figures may differ. All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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New Listings A count of the properties that have been newly listed on the market in a given month.
December 2,584
Year To Date (YTD) 2,427
2,450
-6.1%
+0.9%
2013
2014
2012
66,872
65,714
+13.1%
-1.7%
2013
2014
59,146
2012
Historical New Listing Activity 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Sold Listings A count of the properties that have sold in a given month.
Year To Date (YTD)
December 3,886
3,983
+14.7%
+2.5%
2013
2014
56,407
+17.9%
+1.2%
2013
2014
47,277
3,387
2012
55,741
2012
Historical Sold Listing Activity 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Total Days on Market The average number of days between when a property is first listed and when an offer is accepted. Sold listings only.
Year To Date (YTD)
December
69
70 55
48 39
-21.4%
-28.7%
2013
2014
2012
35
2012
-31.1%
-26.8%
2013
2014
Historical Total Days on Market 130
110
90
70
50
30
10 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Median Sold Price The median sold price for all sold listings in a given month. Does not account for seller concessions and/or down payment assistance.
December
Year To Date (YTD) $285,250
$234,000
2012
$251,700
$232,500
+7.6%
+13.3%
2013
2014
$274,900
$254,000
2012
+9.2%
+8.2%
2013
2014
Historical Median Sold Price $300,000 $280,000 $260,000 $240,000 $220,000 $200,000 $180,000 $160,000 $140,000 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Average Sold Price The average sold price for all sold listings in a given month. Does not account for seller concessions and/or down payment assistance.
Year To Date (YTD)
December
$289,900
2012
$305,775
$339,636
+ 5.5%
+ 11.1%
2013
2014
$324,282
$305,048
$280,259
2012
+ 8.8%
+ 6.3%
2013
2014
Historical Average Sold Price $340,000 $320,000 $300,000 $280,000 $260,000 $240,000 $220,000 $200,000 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Percent of Sold Price to List Price Calculated by comparing final sold price to list price for sold listings. Does not account for seller concessions and/or down payment assistance.
Year To Date (YTD)
December 98.3%
98.3%
98.9%
0.0%
+0.6%
2013
2014
2012
98.3%
2012
99.0%
99.2%
+0.7%
+0.2%
2013
2014
Historical Percent of Sold Price to List Price 100%
99%
98%
97%
96%
95% 1-2009
1-2010
1-2011
1-2012
1-2013
1-2014
All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Annual Review Historical look at key market metrics for the overall region.
Sold Listings
Total Days on Market 55,741 47,277
87
95 69
40,189
39,082
48
2010
+2.8%
+17.6%
+17.9%
2011
2012
2013
Median Sold Price*
$212,000
2010
2010
+9.2%
-27.0%
-31.1%
2011
2012
2013
97.1%
98.3%
99.0%
-0.3%
+1.2%
+0.7%
2011
2012
2013
Percent of Sold Price to List Price*
$209,779
$232,500
$254,000
-1.0%
+10.8%
+9.2%
2011
2012
2013
97.4%
2010
* Does not account for seller concessions and/or down payment assistance. All data from REcolorado速. Powered by 10K Research and Marketing. Due to differences in statistical methodologies, figures may vary from other market reports provided by REcolorado速.
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Market Snapshot YTD 2014 vs YTD 2013 As of December 31, 2014
YTD 2014 Single Family (Detached + Attached)
YTD 2013
% Change
New Listings
65,714 66,872
‐2%
Under Contract
70,612
67,508
5%
Sold
56,407 55,741
1%
Avg CDOM
35 48
‐27%
Avg Sold Price
$ 324,282 $ 305,048
6%
New Listings
48,803 53,288
‐8%
Under Contract
51,732
53,780
‐4%
Sold
41,363 44,305
‐7%
Avg CDOM
37 48
‐23%
Avg Sold Price
$ 360,335 $ 332,663
8%
New Listings
16,910 13,584
24%
Under Contract
18,880
13,728
38%
15,044 11,436
32%
Avg CDOM
30 48
‐38%
Avg Sold Price
$ 225,157 $ 198,079
14%
Single Family Detached
Single Family Attached
Sold
Source: Metrolist, Inc. ‐ Compiled by 10K Research & Marketing ©1998‐2014 Metrolist, Inc. All rights reserved
2014 Highlights and 2015 Predictions for Real Estate • Sellers continue to be in the drivers’ seat in the sale negotiations of homes especially priced below $400,000. • The briskness of sales and the amount of buyers buying was the hottest topic in 2014. The inventory continued to reduce during the year. When inventories drop like buyers make their moves in the market to purchase at a brisk pace. • The increase in home prices across the metro area gain has helped people feel a little wealthier as more home have more equity than they have had over the last 8 years. • 2014 sold data reflects 41,363 single family units closed this year compared to 44,305 homes in 2013. This 7% decrease indicates sales for the Denver Metro area are flattening and does indicate a more conservative growth moving forward into 2015. • The number of condo’s closed data for 2014 is 15,044 units. This is a 32% increase over 2013 which recorded 11,436 condo’s closed. Clearly the increase in condo sales is a direct result of the increase in average sales price for Denver causing buyers to move to condo’s as a price point they can afford. • The number of sold properties in Denver for 2013 priced below $500,000 is 36,566. Homes priced below $500,000 make up 84.12% of all the sales in Denver. • Homes priced above $500,000 that sold in 2014 is 7085 homes compared to 2013 which had 6425 homes or a 10% increase in sales. • Condominium sales in 2014 recorded 15,044 units sold. Most of the sales of condos were under $500,000 making up 97.46% of all the condo’s sold. • Average Price is the third Highlight of 2014 marking a strong increase to recapture lost equity in homes. • The median price of a single family home and condominiums by the end of 2014 is $274,900 compared to $254,000 at the end of 2013 or an 8.2% increase. • Price rises when days on the market shortens because buyers are making a more aggressive buying position. The Days on the market in 2013 was 48 for a home and today it is 35 or a 26.8% decrease in Days on the Market.
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THREE FUTURE THOUGHTS ABOUT WHERE 2015 HOUSING MARKET WILL BE. 1. Inventories will start to rise over 2014 levels, except for the hottest neighborhoods in Denver. The reason for an increase of the inventory in the housing market is an increase of equity in the real estate market has occurred in 2014, which is giving the freedom for a segment of sellers to place their home on the market and move. Today’s home Prices have more than offset the adjustments made during the 2008 to 2012 years. There are a sufficient number of households who could not take advantage of refinancing at the lower interest rates and may consider selling now that they have a chance to get out without bring cash to closing. Finally, unemployment for 2015 is improved to the point in Colorado and anticipated to be in the 4% range for unemployment for the upcoming year which brings some additional buyers to the buyer pool, creating a situation for sellers to capture the Right Buyer for their home. 2. Sales will decrease slightly for 2015 with sales to be approximately 53,000 single family and condos sold. 2014 experienced a continued abnormal amount of buyers entering the market due to low interest rates, stability in their personal economic situation and housing prices that were at 2006 levels. As the single family and condo homes closed in 2014, 2015 will be 2-3% less in number of units closed, which would still make 2015 the one of the highest number of sales in a decade. There primarily reason the housing market will see fewer buyers the second half of 2015 is that 1: Interest rates will be higher than today. 2: Secondly, the easing of the borrowing guidelines still require such rigid proof of ability to buy that self-employed or newly employed workers do not meet most of the guidelines causing the buyer pool to retreat some in 2015. 3: The inventory of properties continues to remain lower than normal, causing buyers to rent versus buy in 2015. This all gives for the number of units predicted to close to be less than 2014. However, due to interest rates holding steady for at least the first 8 months of 2015, we should see the same number of homes close early in the year as in 2014. 3. Prices of homes below $500,000 will increase 3-4% in 2015 depending upon the location. I do not see any prices of homes below $500,000 reducing in 2015 unless a major job loss occurred in one area, like the airport causing the housing in sub area was affected by an economic occurrence. Prices above $500,000 are finally on the rise. We see prices rising up to $1.5M depending upon the geographic location of a home. Location in upper end priced homes will really dictate the increase. For example, a $750,000 home in Cherry Creek is liable to go up at a faster rate than the same $750,000 in suburbs of Douglas County. Why would this be? It goes back to the comfort level of the buyer pool who will pay more for location than worry about value. With interest rates, even for jumbo loans at record low levels, some buyers who have economic stability in their life can see a bargain even at higher prices due to location. The luxury market is improving and will slowly have appreciation especially in the suburbs where luxury living becomes a destination not generally a visited location with urban amenities. Buyer behavior has changed and buyers are more interested in convenience than mega mansion size. Hence housing in Denver moves faster than Evergreen.
THANK YOU FOR ALLOWING THE DENVER 100 TO BE YOUR RESOURCE FOR THE DENVER HOUSING MARKET. WE ARE GRATEFUL FOR THE OPPORTUNITY TO SERVE YOUR REAL ESTATE NEEDS IN 2015.
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