Statistics Seem Not to Reflect a Coming Slowdown in the Real Estate Market

By JIM SMITH, Realtor

Because of recent national and regional reports that the real estate market is changing from a seller’s market to a balanced, or even a buyer’s market, I have drilled down into the statistics for real estate activity in Denver and Jefferson County, looking for evidence of that shift. After all, as in politics, all real estate is local, and even reports about Metro Denver’s real estate market don’t necessarily reflect what is happening in each of the metro area’s six counties.

So, are the Denver and Jeffco real estate markets changing from a seller’s market to a balanced or buyer’s market?  The answer appears to be “yes,” as I’ll show below, although the data in the 25-month charts above provide no indication of a coming slowdown. While 25 months might seem like an odd timeframe for a chart, I used it so you could compare this November (on the outer right) with November 2016 (on the outer left) as well as all the months in between.

Two measures of a market’s health are the trends in median sold price and the median days on market. The charts show continued year-over-year increases in the median sold price in both Denver and Jefferson County and only seasonal changes in the days on market. When median days on market are this low — ranging from 5 to 16 days in both Denver and Jefferson County over the past two years — you know it’s a seller’s market.

However, the listings that are currently active or under contract and those which have sold thus far in December suggest that, from a purely mathematical standpoint, 2019 statistics will document a shift in Denver’s and Jeffco’s real estate market.

As I write this on Tuesday, December 11th, there are 1,832 active Denver listings on REcolorado. The median days on market of those listings is 54, more than triple the median days on market for last month’s sales. There are 1,230 Denver listings that are under contract, and their median days on market is 24.  Of the 200 Denver listings which closed between December 1st and 11th, the median days on market was only 20.  Clearly, as those currently active and under contract listings change their status to “sold,” the median days on market will rise significantly by month’s end and into 2019.

The figures for Jefferson County mirror those of Denver. Median days on market for active listings is 42, median days on market for under contract listings is 25, and median days on market for listings sold December 1st to 11th is 19. As with Denver, it’s safe to say that Jeffco’s market has already begun to slow, and statistics will reflect that in coming months. 

If you’re thinking of selling your home, don’t let yourself be blindsided by this evolving market. You can still sell a home quickly in a slowing market, but only if you price it correctly. As I have written before, you can’t underprice a home, because competing offers will drive the price upward. And by pricing your home correctly, you’ll benefit from those competing listings that were not priced appropriately. Call me or another Golden Real Estate agent at 303-302-3636 if you’d like advice on pricing your home to sell.

West Denver Bungalow Is Close to Light Rail Station

This home at 735 Perry Street would make a good starter home or fixer-upper.  Along with a new roof and recently serviced forced-air furnace, the home’s interior just received a new coat of paint. The next owner can freshen things further by refinishing the hardwood floors. The nice-sized yard is fenced and has two sheds and sprinklers both front and back. The exterior needs paint, and the bathroom is dated. Access to the Lakewood Gulch Trail is just two blocks north, and the Perry Street station of the light rail’s W Line is two blocks further north in the Lakewood/Dry Gulch Park.  You can view more photos and take a narrated video tour at www.WestDenverHome.info, or stop by the open house on Saturday, Dec. 15th, 11am to 2pm.  It was just listed this week for $280,000 by David Dlugasch.  Call David at 303-988-4835 to arrange a private showing.
 

Applewood Brick Ranch Has a Finished Walkout Basement

Click on the narrated video tour below to tour this 4-bedroom, 4-bath home at 3315 Beech Court, located in the part of Applewood that’s west of Interstate 70.  It’s near the end of a quiet cul-de-sac, across 32nd Avenue from  Manning Middle School and Maple Grove Elementary, just east of Applewood Golf Course. The Applewood Shopping Center, with its stores and restaurants, is just a half-mile away. With this home’s convenient access to I-70, you can be in downtown Denver in less than 30 minutes or reach the ski slopes of Summit County in about an hour.  After watching the video tour, check out the magazine-quality photos at www.ApplewoodHome.info, then come to the open house on Saturday, Dec. 15th, from noon to 2 pm.  

Should You List Your Home During the Holidays? The Answer May Surprise You

The national real estate media and blogs have finally caught onto something I’ve been saying for several years — that winter, even during the holidays, is a great time to put your home on the market.   The lead article this week on RSImedia’s “Housecall” blog, for example, promotes listing homes during the upcoming holidays, writing as follows:

“With the colder temperatures and many people heading on vacation, it may seem like an inopportune moment to list your house, but that couldn’t be further from the truth.  Although it’s true that there are fewer buyers looking for a home at this time of year, the pros far outweigh the cons. There are fewer, yet far more serious buyers searching for homes in your market, and there is less competition with fewer homes on the market, and transactions proceed more quickly….”

The blog post gives three reasons why the holidays are a good time to list a home. First, sellers needn’t worry as much about staging the home. “Homebuyers who shop during the off-season are typically very serious about getting into a house. They’re unlikely to waste their time viewing homes that don’t already suit their criteria, and will be able to look past your child’s messy playroom.”

Second, the article states that transactions move more quickly, since inspectors, lenders, appraisers and title companies have less of a backlog.  (Personally, I don’t see this being so significant.)

Third, the article points out what I think is most important — there are fewer homes competing for attention against your home.   Sellers should particularly appreciate the fact that buyers who want to see listings at this time of year are probably serious about buying. “Lookie loos” are most often fair weather visitors. So, fewer people are likely to want to see your home during the holidays, but those who do are typically of the highly qualified and highly motivated variety.

What the RSImedia blog post fails to address is what changed to make the holiday season a good time to list a home, because that wasn’t true years ago.  I believe it is because of how the internet has changed the relationship between buyers and their real estate agents.

In the past, agents would do the looking, contacting their client when they identified a home they think their buyer would like. With today’s MLS systems, agents can enter their buyers’ search criteria into the MLS, which triggers an email alert whenever the system identifies a listing matching those criteria.

Thus, while agents might lose focus from time-to-time, the MLS computer never stops watching and alerting. The minute a suitable listing is entered in the MLS, buyers are alerted.  Some of these folks are sufficiently motivated that if the listing “checks enough of their boxes,” they’ll call their agents to request an immediate showing — even on Christmas eve.

Buyers can set up similar alerts themselves on consumer-facing real estate websites such as Zillow, but they can’t use nearly as many search criteria as their agent can.  For example, I don’t know of a single consumer-facing website that allows a user to search for main-floor master suites, fenced yards, homes with mountain views, or homes with full-but-unfinished basements.  The MLS system on the other hand, allows its member agents to search for all of these criteria – and more.  If it’s a field on the MLS, it can be a search criterion for us agents.

If you aren’t able to search for exactly what you want on those consumer-facing websites, ask us or your agent of choice to set up the search for you.  It doesn’t cost the agent or you anything to create these alerts. 

In previous years I’ve published statistics showing how well listings sell in the winter.  You can find those columns at www.JimSmithColumns.com.

‘Conforming’ Loan Limits Raised

Until recently, the conventional loan limit was $417,000. Anything above that was considered a “jumbo” loan, which had stricter credit requirements and higher interest rates.  But things have changed.

Last week, Fannie Mae and Freddie Mac, the two government-sponsored entities that purchase the bulk of mortgage loans from lenders, raised that limit to $484,350 for much of the country.  In some regions with higher property values however, including metro Denver, the limit is now $561,200. This is good news for borrowers, as conventional loans allow a smaller down payment percentage versus that of Jumbo loans – as little as 3%.

Contact your mortgage broker to see if it makes sense for you to buy (or sell, for that matter) before mortgage rates rise further. If you don’t have a mortgage broker call us. We can put you in touch with several professionals we know and trust

Readers Offer Suggestions on Making Homes More Resistant to Wildfires

I was pleased to get several responses to last week’s column on protecting homes from wildfires.

One reader suggested that building a house out of concrete might help.  While this is a good idea, remember that such a house would still have a roof and openings for windows and doors that would need to be made as fire-resistant as possible.

Another reader suggested installing outdoor smoke detectors, something that hit close to home with a friend of mine. She said that a firefighter once rang her doorbell to warn her of an approaching wildfire. The moment she opened the door she smelled the smoke, but she hadn’t smelled it when she was indoors. For that matter, why not cell-connect detectors in the forests?

That prompted me to wonder why building codes don’t require smoke detectors in attached garages, but only require that the walls, door and ceiling be fire-rated to extend the time it takes for a garage fire to penetrate the living quarters.

Lastly, one reader pointed out that in a firestorm no measures are likely to prevent a home from being consumed.  So true.

Keep the suggestions coming.  You can comment on this post or comment on the original post from last week. 

Affordable Westminster Condo Just Listed by Chuck Brown

2720 W 86th AveBe sure to check out this move-in ready and affordable 2-bedroom/1bath condo at 2720 W 86th Ave. #69, Westminster. The owners just completed a comprehensive remodel which included a stylish new kitchen, new bathroom, new tile and carpet flooring, and new paint.  The outdoor covered balcony was recently renovated  by the HOA. The location between Hwy. 36 and I-25 makes for an easy commute to Denver or Boulder. This unit is 1,000 sq. ft. and is located on the 2nd floor of the 3-story building. Take a narrated video tour at www.WestminsterCondo.info.  Open house will be Sunday, Dec. 9th, from 11 a.m. to 1 p.m.  Or call listing agent Chuck Brown at 303-885-7855 for a private showing.  Listed for only $195,000.