Average Denver Metro Home Prices INCREASE by over $75,000

Here is the 7 County MLS report for October courtesy of SMDRA and REColorado.

  • 5,921 properties closed last month, an increase of 25.6% from last October and a whopping increase of 39% from October 2018 when mortgage rates were nearly 5%.
  • 1,653 buyers closed on attached homes last month, an increase of 23% from a year and a 27.8% increase from 2 Octobers ago.
  • 4,268 buyers closed on detached homes in October, an increase of 26.6% from last October and a 44% increase from 2 years ago. WOW!
  • 5,718 homeowners newly listed their homes for sale last month, an increase of 14.5% from last year and a 14.4% increase from 2 years ago.
  • We saw 1,911 new listings of attached homes, a big 23.7% increase from a year ago.
  • We saw 3,807 new listings of detached homes, a much smaller increase of 10.4% from last October.
  • 5,700 properties went under contract/pending last month, an increase of 28.3% from last year and a HUGE increase of 41% from 2 years ago! 
  • The average closed price for all properties last month was $552,406, an increase of 16% from a year ago. This was over a $75k PRICE INCREASE!
  • Attached homes sold for an average of $388,643, an increase of 7.3% from a year ago.
  • Detached home prices sold for an average of $615,832, a whopping increase of 18.1% and a price increase of $94,000!
  • The median close price last month for all properties was $470k, an annual increase of 11.9% or $50k.
  • The median closed price for an attached home was $335k, a 11.5% price increase.
  • the median closed price for a detached home was $510k, an increase of 13.3% or $60,000! 
  • The average closed to original list price ratio was 99.4%. The last 2 Octobers this number was 97.3% and 97.2%.
  • During October 2016 and 2017 the Average Closed to Original List Price Ratio was 98.2% in 2016 and 98.1% in 2017. This month we were at 99.4%, which is a sign of how much stronger our RE market is TODAY then it was 3 or 4 years ago.
  • Average Days in Market was 23 days down from 33 days or down 30%.
  • Median Days in Market was just days down from 17 days last October, this is a whopping decrease of 65%. I NEVER EVER thought I would see a 65% change in a statistic in just 1 year!
  • We ended October with just 3,975 properties for sale.
  • This puts months of inventory at 0.67 months or roughly 20 days.
  • These cities had a Median Days in Market of just 5 days-Arvada, Highlands Ranch, Lakewood, Littleton, Parker, Thornton, and Westminster. 
  • October was the first month with fewer than 6,000 new listings since April.
  • Where we need more new listings the most is in the $500k-$600k price range.
  • Pendings or under contracts have been > 5,500 for 6 consecutive months or since May.
  • We have sold more than 5,800 properties for 5 consecutive months.
  • 48,596 properties have sold so far this year. We could eclipse 60k sales for the first time ever possibly this year.
  • Since June the average closed sales price has risen by $50,000!
  • Since June the median closed sales price is up by $28k.
  • We have experienced 6 Median DIM for 3 consecutive months.
  • Average DIM has been an average of 23 days for the last 6 months. 

Here is Median Days in Market last month by price range-

  • $100k-$200k-14 days
  • $200k-$300k-8 days
  • $300k-$400k-5 days
  • $400k-$500k-5 days
  • $500k-$600k-7 days
  • $600k-$700k-7 days
  • $700-$800k-8 days
  • $800k-$900k-8 days
  • $900k-$1.1M-11 days 

We spent 6 weeks from March 15th until April 27th under Stay at Home Orders. Here is how our real estate market has responded since May over the last 6 months. These are year over year changes averaged over the last 6 months-

  • New listings are up an average of 4.1%.
  • Pendings are up an average of 25.9%.
  • Solds are up an average of 16.9% over the last 5 months as solds were down 44% in May after the Lock-Down Orders.
  • Median prices are up by an average of 7.1% over the last 6 months. But, here is the trend line since May-up 2.1%, up 4%, up 6.7%, up 8.3%, up 9.9%, up 11.9%. In essence the trend tells me that median home prices are increasing by roughly 2 percentage points a month. Thus, we may see our median prices up by nearly 14% year over year for November. The fact that early demand as measured by Pendings has been increasing by roughly 600% more than the increase in New Listings tells me that this cumulative drop in supply will continue to cause home prices to surge.
  • Months of inventory has been plunging from 1.93 months in May and is now down to 0.67% a drop of 65%.
  • Months of inventory has average just 1.01 months for the last 6 months. And MOI has been at 1 month or less for 5 consecutive months! 

My Thoughts and Comments

  • Normally in a Presidential election year buyer demand slows considerably until after the election; but not this year. Demand is still up over 25% year over year by both measurements of pendings and closings.
  • And supply is increasing by 14% year over year, but it’s not enough. More properties closed last month than new homes listed for sale for the first time. This is NOT supposed to ever happen!
  • Demand for attached homes is still very strong; but the supply of attached homes is increasing more than 2 times faster than supply is for detached homes.
  • There was a HUGE difference in price increases between attached and detached homes as average prices only rose 7.3% for attached homes, whereas average prices for detached homes SOARED by 18.1%. This tells me that demand for detached homes IS THROUGH THE ROOF, which is not surprising as buyers want more SPACE, space between homes and space in their homes.
  • It was intriguing to see the median prices of attached homes rise 11.5% while their average prices only rose 7.3%. This tells me the lower half of the market is pushing prices up on attached homes. This is a good sign. However, I bet the downtown Denver condo market slowdown is keeping average prices from rising as fast as I am hearing about lots of price cuts in downtown Denver.
  • The fact that average prices for detached homes rose by an additional 5 percentage points above the median price tells me that bigger homes are demanding the most attention from buyers. Far fewer people are looking for that 3/2 tri-level with 1300 square feet as it’s not a big enough home for a family now in the age of COVID.
  • I am flabbergasted to report that average detached home prices are up nearly $95,000 in just 1 year! I never thought I would this big of a price increase!
  • And for buyers waiting to buy for whatever reason they are quickly getting priced out of the market. That $350k detached home early this year may now be $400k and now our buyers need to be looking for an attached home.
  • With winter coming I am afraid COVID will keep people working from home and their kids learning from home. Is your current home up to this triple duty-home/refuge, office, and school? If not, I believe buyer demand will continue to soar and without enough supply home prices will continue to increase by double digits potentially for many months to come.
  • And mortgage rates below 3% will help fuel this amazing demand!
  • Thus, I don’t recommend waiting to buy a home.
  • Finally I strongly encourage you to open a Heloc on your home if you don’t have one yet to take advantage of today’s record high prices as a Heloc can help you purchase more properties, remodel your current home, pay off more expensive debt, or just serve as an emergency savings account.