Metro Denver has 2.1 months of inventory on the market. This means that, at the current pace of sales, it would take just over 2 months to sell every single-family home currently listed for sale.
But that’s not the whole story because inventory levels vary drastically depending upon the price of the home.
When we take a closer look at months of inventory broken down by price range this is what we see:
• Under $400,000 = 0.9 months
• $400,000 to $500,000 = 1.8 months
• $500,000 to $750,000 = 3.1 months
• $750,000 to $1,000,000 = 4.2 months
• Over $1,000,000 = 7.7 months
These numbers represent great news for move-up buyers because they can sell in a strong market and potentially move up to a market that is market that is not as strong.
Below is a short video with a recap of our annual Market Forecast presentation!
The Front Range may have lost out on Amazon’s HQ2, but that doesn’t mean their company won’t affect our economy.
Denver was in the running for Amazon’s massive new second headquarters that supposedly would bring 50,000 new high-paying jobs and $5 Billion of investment.
In the end Amazon chose to split the headquarters among two East-Coast cities and many in Colorado breathed a sigh of relief.
But they are will continue to be an economic force in our state.
Over the past two years, Amazon has greatly expanded its footprint in Metro Denver, opening up a sorting center in Aurora, fulfillment centers in Aurora and Thornton, a Prime Now center in Denver and a new delivery center in Centennial.
They will soon have 3,000 workers here and that number is expected to grow significantly.
Whether you’re buying or selling, accurately pricing a home requires professional assistance from someone who knows the neighborhood.
The “estimated” home prices you see posted online can be off by tens of thousands of dollars – not because they’re dishonest, but because the computer programs generating these guesstimates don’t take into account the current condition of a house, the amenities that are included, the qualities of the surrounding neighborhood, and so much more.
A real estate agent’s appraisal will not only consider the selling prices of surrounding properties, as the online services do, but also take into consideration a host of other criteria. For instance, when it comes to assessing the surrounding neighborhood, the following factors can often significantly affect the market price of a home:
The quality of neighborhood schools has a dramatic impact on home price, whether buyers have school-age children or not. In the most recent study on the subject, researchers from the Federal Reserve Bank of St. Louis found that above-average public schools (those with math scores 4.6 percent better than the average) increased the value of nearby homes by 11 percent (or an average of $16,000) in the St. Louis area.
A park within walking distance
Parks are so important to families today that simply having one within a quarter mile can increase the value of a house by 10 percent, according to a new study from the University of Pennsylvania’s Wharton School.
The impact that retail areas have on home values depends on the type of community. According to a study recently released by the Massachusetts Institute of Technology, homes in urban areas sell for six percent to eight percent more than average if they’re within a quarter mile of a retail cluster (shops and restaurants). However, in suburban communities, it’s the homes that are a mile from any retail centers that sell for the most (homes located closer than that actually sell for 8 percent less than average).
Because we’re a car-oriented society, most people are willing to pay more to live within a couple miles of an on-ramp to a major highway or freeway, which saves gas and speeds commute times. However, if the home is located too close (within a half mile of the freeway), the associated noise and air pollution can push the price in the opposite direction.
Vacant lots in the vicinity
Being surrounded by vacant land can be a good thing in rural areas, but it’s usually a negative for urban homeowners. A recent Wharton School study found that higher concentrations of unmanaged vacant lots in an urban neighborhood drag down the values for surrounding homes by an average of 18 percent.
Proximity to nuisances and environmental hazards
Two recent studies (one from an Arizona assessor’s office, the other by the University of California Berkeley) show that homes located near a landfill or power plant usually sell for four to 10 percent less than more distant homes. The same can usually be said for homes located too close to manufacturing facilities – especially those that make lots of noise or produces noxious odors.
According to a recent study by the Massachusetts Institute of Technology, the value of a home decreases by one percent for every foreclosed home within 250 feet of it. Why? The lower sales prices of foreclosed homes can quickly drag down the neighborhood’s comparable prices. Plus, the owners of these properties usually don’t have the money or interest in maintaining them after they go into foreclosure, which can create an eyesore for all the other homes in the vicinity.
Percentage of homeowners
Are there more owners than renters living in the neighborhood? If so, property values are usually better than average. Homeowners tend to take better care of their property than renters or landlords, which improves the curb-appeal for the whole community.
Some communities have a wealth of quality public services available to them – including regular street cleanings, scheduled street repair, graffiti removal services, landscape maintenance, neighborhood beautification efforts, and more. Needless to say, homes lucky enough to be located in those areas typically command higher property valuations.
Home sellers can use these factors to justify a higher asking price. Buyers can use them to try and negotiate something lower. However, when it comes to attaching specific dollar amounts, that is something best left to your real estate agent, an objective professional with a deep understanding of the local market.
If you are looking for an experienced real estate agent, connect with us here.
Here’s some good news for buyers who have been waiting for more selection…
No need to wait any more because the numbers show that more new listings are hitting the market compared to the recent past.
In Metro Denver, the number of homes for sale is up 14.42% compared to last year.
That equates to 800 more homes to choose from.
Start spreading the news!
Virtually all of the experts we follow put rates above 5% going into next year and some see rates approaching 5.5% by the middle of 2019. What’s certain is that there are economic forces at work that are pushing rates higher.
So, how about a little history lesson? How do today’s 30- year mortgage rates compare to this same date in history going all the way back to 1990?
• Today = 4.85%
• 2017 = 3.94%
• 2015 = 3.82%
• 2010 = 4.27%
• 2005 = 5.98%
• 2000 = 7.84%
• 1995 = 7.75%
• 1990 = 10.22%
While today’s rates feel high only because they are higher than 2017, they are quite a bit lower than at many times in history.