Real estate, just like most other things, has been quite a ride this year. We have had lots of questions from folks about how the market is faring.
We just finished compiling the most recent numbers for Boulder County and the Denver Metro.
See below for market stats and analysis.
Median Sold Price
The statistic on top of most buyers and sellers minds is the Median Sold Price. The Median Sold Price statistic shows whether home values in an area are increasing or decreasing as compared to previous years.
Median Sold Price- Boulder County
Median Sales Price in Boulder (when considering both attached and detached homes) is up 3% year-over-year. This metric shows us that while sales price increases have slowed from the extremes of 2015 and 2016, the city is still experiencing an appreciating market.
Lafayette and Longmont are also up year-over year with a 3.6% and 6% increase respectively. Louisville is up year-over-year with a 3.5% increase.
Median Sold Price- Denver, Arvada, Westminster, and Broomfield
The Denver metro real estate market continues to perform strongly. Denver has a varied and strong economy and is the economic driver of the Front Range. The numbers in Denver indicate it is appreciating at a faster clip than Boulder County.
Median Sold Price in Denver is now at $454,000, up 6.8% to this same time last year. This number is quite variable throughout the city, with the most attractive neighborhoods seeing higher appreciation, and less attractive neighborhoods with fewer amenities lagging behind.
The other communities on the outskirts of Denver, like Arvada, Westminster, and Broomfield, offer home buyers a good amount of bang for their buck and proximity to the mountains, while still keeping the commute to Denver a reasonable 30 minutes or less. We are seeing these communities performing very well year-over-year with Median Sales Price in Arvada up to $454,700 (up 7%), Westminster up to $395,000 (up 5.3%), and Broomfield up to $489,000 (up 4.7%).
Median Days on Market
The Days on Market metric shows us how many days it is currently taking for homes to get from the first day of their listing to the closing table.
We have two local Multiple Listing Services in this area and they show Median Days on Market differently on their platforms. The Northern Colorado Multiple Listing Service (IRES) shows Median Days on Market calculated as the total amount of time a home is listed (from day 1 to the closing day). The Denver Metro Multiple Listing Service (Matrix) shows Median Days on Market calculated as the total amount of time a home is listed before accepting a contact, so we have to take this into account when we are considering this data.
Let’s look at the northern Colorado data first.
Median Days on Market- Boulder County
As you can see from the graph above, the Median Days on Market is varied depending on what city you are considering in Boulder County. In Boulder, the Median Days on Market is flat year-over-year at 48 days. This means from the list date to the closing date we see an average of 48 days of total list time.
If Median Days on Market for a specified area is 48, that means a home is most likely for sale and being shown for about 18 days, then the seller of that home is accepting a offer from a buyer, with the Under Contract period being about 30 days so a buyer can do their due diligence and close on their loan. This number is highly variable between properties. While some homes may fly off the market with multiple offers, others may sit for longer, especially in the upper price ranges.
The Days on Market in Longmont is now at 43 days, down 6.5% from last year. The Median Days on Market in Louisville is at 43 days (up 2%) and Lafayette is now at 42 days (up 7%).
Now, let’s look at the data from the Denver metro.
Median Days on Market- Denver, Arvada, Westminster, and Broomfield
This graph is showing us the Median Days on Market, calculated from the day of listing to the day a seller accepts a contract. You can see that the Days on Market for the Northwest Denver area is quite a bit faster than in Boulder County. While a seller in the city of Boulder may expect to show their home for about 18 days before accepting a contract, sellers in Arvada, Westminster, and Denver could reasonably expect their homes to receive an offer more quickly- in 7, 6, and 10 days respectively.
These fast Days on Market metrics indicate very high buyer interest and buyer demand in these areas. Multiple offers are common and buyers need to be quick and decisive to win and secure a home.
Months Supply of Inventory
Another metric Realtors use to evaluate market conditions is the “Absorption Rate”. This number is the months of supply of listings currently on the market. It lets us compare how many listings we have to how many buyers are in the market. An Absorption Rate of 6 months means that if no new listings were to come on the market, all current and active listings would be sold within 6 months. This is what we consider to be a balanced market. An Absorption Rate of below 6 months indicates a Seller’s Market.
Months Supply of Inventory- Boulder County
Inventory levels in Boulder County are down across the board. The Months Supply of Inventory in Boulder is 2.8 Months, down 9.7% as compared to this time last year. Inventory numbers in Longmont, Lafayette, and Louisville are down year-over-year as well. Longmont shows 1.7 Months of Inventory (down 22%), Louisville shows 1.7 Months (down 15%), and Lafayette shows 1.5 Months (down 11%). As all of the inventory levels are still well below balanced market levels of around five to six months, we can expect to see high buyer demand and competition for the best homes in the best condition.
Months Supply of Inventory- Denver, Arvada, Westminster, and Broomfield
The four cities of the Northwestern Denver area all show very low inventory levels as compared to this time last year. Denver’s Months Supply of Inventory is at 1.5 Months, a 16% decline year-over-year. Broomfield, Arvada, and Westminster have significantly decreased Months of Inventory at 1 Month, .8 Months, and .6 Months respectively. The Months Supply of Inventory numbers in the Northwest Denver area still indicate a sizzling hot Seller’s Market. The best homes in the best condition should see strong buyer demand and receive multiple offers and offers over the list price. This is in line with our recent experience with buyers in these markets.
So what do all of these numbers tell us about how our market is faring? What might Buyers and Sellers expect in the upcoming weeks or months?
The numbers right now show a Front Range market with very low housing inventory and high buyer demand, pretty much across the board. Low inventory is, of course, being driven by some seller’s unease in putting their homes on the market and having members of the public come through during a pandemic. Also, the low housing inventory numbers are in line with a presidential election year as well. As the public becomes distracted by the election, housing decisions are put off until after the new year. This is a common phenomenon, being driven to extremes by a very heated presidential race and pandemic concerns.
While sellers may be hesitant to put their homes on the market, buyers are ready and willing. Buyer demand is being driven by a few factors. First, many buyers need more space to cope with working and schooling kids from home and this is necessitating some moves. Second, interest rates continue to be amazingly low. Third, Colorado is likely experiencing a higher net influx in population due to the pandemic. We’ve heard anecdotal evidence of booming mountain real estate and Governor Polis shared an article a month or so ago about how folks are taking the leap to move out to Colorado now that they may be less tied to their desk job and office obligations. Add to this that U.S. News and World Report just named Boulder and Denver the #1 and #2 best places to live in the country and we can expect the migration to continue.
It is worth noting there are hot spots in the market and cooler spots, as well. The single family home market continues to be very strong, while the condo market, especially around CU and in downtown Denver is sluggish.
As always, if you have more questions, don’t hesitate to reach out! Until next time!