Tight supply and strong demand in Denver-area homes made for a new record low in housing inventory for the month of November, yet Denver is still on pace to break total record number of homes sold in 2017.
In November compared to the month prior, the number of active listings, new listings, average and median sales prices, and number of homes under contract or sold were all down.
Yet, year to date, today’s market is ahead of last year overall and, furthermore, 2017 is on pace to break last year’s record for the number of homes sold in Metro Denver. The number of homes sold decreased by 13.51 percent compared to the previous month, however it is up 3.28 percent year to date compared to last year. The biggest issue the housing market is facing, according to Steve Danyliw, Chairman of the DMAR Market Trends Committee and Denver REALTOR®, is the strong housing demand and tight inventory.
“This time of year brings the holiday rush and colder weather – it also brings colder housing numbers,” said Danyliw. “The amount of housing activity closely follows the weather. It’s simple: more people buy homes when it’s warm compared to when it’s cold. The biggest story line continues to be low inventory and, like last month, November set a record-low in inventory.”
This past November closed with 5,131 active listings, compared to 5,420 in November of 2014, which was the previously recorded low for that month. For context, the average active listings for November are 15,232 (1985-2016), and the record-high November was 2006 with 27,530 listings.
“To ease inventory, we need homebuilders to deliver us a present by building more homes, and we need a slower pace of people migrating to our state,” he adds. “History tells us that inventory will continue to decrease until sometime around February. We may be looking at more record lows. The lowest recorded inventory number was 3,878 in February 2017. If current trends continue, we may see inventory below 3,800.”
Furthermore, according to Danyliw, tight supply and strong demand should continue to move home prices higher, but at a slower rate from the last three years. Affordability will become the biggest driver for the foreseeable future.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999) and “Premier Market Report” (properties sold between $500,000 and $749,999). In November, 135 homes sold and closed for $1 million or greater, down 18.18 percent month over month and up 22.73 percent year over year. The closed dollar volume in November for all luxury residential was $204,312,105, down 19.48 percent month over month and up 16.60 percent year over year.
The highest priced single-family home sold in November was $4,500,000 representing six bedrooms, four bathrooms and 3,088 above ground square feet in Greenwood Village. The highest priced condo sold was $5,300,000 representing two bedrooms, four bathrooms and 5,210 above ground square feet in Denver. The listing and selling agents for both transactions are DMAR members.
“Luxury home sellers have much to be grateful for in the revelry of the holiday season,” stated Elaine Stucy, DMAR Market Trends Committee member and metro Denver REALTOR®. “As 2017 comes to a close, it has been a truly remarkable year for the luxury market.”
While November Luxury Market home sales took a slight dip to 135 residences from the astonishing 165 residences sold in October, year-over-year and year-to-date sales have soared – up 22.73 percent and 30.28 percent respectively.
“Comparing single-family and condo sales reveals some astounding contrasts to the overall market,” she adds. Overall market sales were down 13.81 percent from the previous month, while the luxury segment had a slightly larger decrease of 18.18 percent. However, that percentage consisted of a lopsided negative 23.53 percent on the single-family residential side, offset by a huge 50 percent increase from last month in the condo segment and an even more impressive 200 percent increase over last year.
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Stucy comments, “No other segment of the market is performing at this level. Of total sales year to date in the luxury segment, a record 10.47 percent of the sales are condos. Condo sales have never surpassed eight percent of the luxury market until now. The trend is obvious: although a luxury condo is not exactly a ‘tiny house,’ it seems luxury buyers can enjoy Santa without a yard large enough for 12 reindeer.”