as reported by one of our preferred lenders Lonnie
Denver’s RE Market vs. The Entire Country
NAR released their October existing home sales report for the nation last week. I thought I would compare the national numbers to our local numbers.
- Homes sales increase by 26.6% year over year as existing home sales hit an annualized pace of 6.85 million in October, the highest level seen since 2006.
- Days on market dropped by 42% to 15 days year over year. I don’t know if this is an average or median figure.
- Months of inventory dropped by 36% to 2.5 months of inventory.
- Average home prices sold rose by 12.3% year over year.
- Median home prices sold rose by 15.5% year over year to $313k
How does the 7-county metro Denver market compare?
- Sales in October were up 25.6% from last October.
- Our average days in market dropped by 30% to 23 days.
- Our median days in market dropped by 65% to just 6 days.
- Our months of inventory has dropped by 58% to just 0.67 months.
- Our average price of all home types sold increased by 16% to $552k
- Our median price all home types sold increased by 11.9% to $470k.
It’s amazing to me to see home prices nationally rise so far so fast when the nation still has 2.5 months of supply of homes for sale. Whereas price increases above 10% are not surprising to me as our MOI has been < 1 months for 5 months.
An Expert’s Biggest Fear for RE
Logan Mohtashami, a writer for Housing Wire has become one of my favorite people to read every week as he is a data geek with lots of charts and graphs. His biggest FEAR For housing from 2020-2024 is NOT a housing crash or bubble; but that home prices would soar and create an affordability issues for many potential buyers. Why?
- The years of 2020-2024 will be the best years demographically for housing demand in our country’s history as Millennials hit their early 30’s by the millions each year. This automatically causes demand for housing to increase.
- Second, housing tenure is now at 10 years double what it was from 1985-2007. Thus, supply of homes has plummeted.
- Third, he expects mortgage rates to remain below 5% during this time further increasing housing demand. Although I bet demand will soften if rates hit 4%.
The New Home Market is On Fire
- Housing starts increased in October by 4.9% from September and starts are up 14.2% from last October.
- All of this increase was in single family home starts which hit their highest level in 13.5 years.
- Multi-unit construction Starts are down 34% from last year. Demand for new apartments is falling as people are moving to the suburbs.
- Permits, which come before Starts, were flat in October from September, but up 2.8% year over year. With such immense demand for new homes it was surprising to see this increase be so small.
The NAHB Housing Market Index rose 5 points to another record high at 90. A reading above 50 indicates expansion, so what does a reading of 90 mean?
Could Mortgage Rates Drop Another ¼%?
One of my mentors, Barry Habib, was on Fox Business last week talking about mortgage rates. He is not concerned with mortgage rates spiking to 4% next year; but he could see rates “flirt” with 3% or 3.25%. Second, he tells the audience that our country’s surging national debt will cause economic growth to slow down and thus inflation rates will drop and thus long-term rates will remain very low and could drop further.
Nationally, conventional 30 year fixed rates were 2.72% for the week ending November 12th. Have you noticed that my rates are lower than this? Barry mentioned that the Fed is now starting to buy some 1.50% mortgage bond coupons and this could cause mortgage rates to drop to 2.375%-2.50% nationally in the coming months. Thus, rates may drop by another ¼% to .375%. To watch Barry for yourself click the link below–
https://video.foxbusiness.com/v/6211026316001/#sp=show-clips