The record low “inventory” continues in Jefferson County, as it does elsewhere in the metro area and much of the country. Most analysts will tell you that it’s because sellers are keeping their homes off the market for one reason or another, but that’s not the truth.
The truth is that there are a record number of new listings each month, but they sell so quickly that the number of active listings doesn’t have the opportunity to increase. Here are Jeffco’s October’s stats compared to prior years:
I like to look at weekly statistics. As of this past Sunday, there were 524 active listings in Jeffco of single family homes, condos and townhomes. There were 189 new listings in the 7 days ending on Oct. 8th, but there were 195 closings, 132 of which had gone under contract in 7 days or less. In real estate parlance, that computes to under 3 weeks of inventory — 524 ÷ 195.
As of Sunday, there were 1,088 Jeffco homes under contract, more than twice the number of active listings, and 55% of them went under contract in 7 days or less.
About those 189 new listings between Oct. 2 and Oct. 8, 137 of them were under contract by Oct. 8th. That’s what I was saying — homes are coming on the market, but they sell right away.
As I write this, the real estate market is a tale of two cities — or, more accurately, a tale of cities vs. suburbs. Because of the virus, Americans are “getting out of Dodge,” leaving the congestion of multi-story buildings and moving to the suburbs and the countryside.
The statistics tell the story. In a recent 30-day period, 46% of the sales in Jefferson County closed above their listing price after being on the MLS for a median of 5 days. It was quite the opposite in downtown Denver. There, during the same 30-day period, 87% of the listings (primarily condos in elevator buildings) sold below their listing prices with a median time on the MLS of 24 days.
It’s the same story nationwide, and for good reason. People are fearful of catching Covid-19, and they know that being in close quarters can’t be good. In the suburbs they can take their dog for a walk without using an elevator and without having to come within 6 feet of another human being. (I’m describing my own life here — I walk my dog Chloe every morning on a one-mile circuit around my subdivision and never come in close contact with the neighbors I encounter. Because of that, I don’t even need to wear a mask on these walks.)
We keep hearing that the inventory of homes for sale is at record low (except downtown), but that’s only true because homes are going under contract so quickly. The chart below, generated on REcolorado.com, tells the story well.
Using the most recent full-month MLS statistics for Jefferson county (September 2020), you can see that we actually had more new listings this September than in any of the five previous Septembers, yet the number of sold listings was nearly the same, so there was no way the number of active listings was going to increase and was, in fact, lower by far than the number of active listings in the five previous Septembers. The median time on the MLS of 5 days tells you why.
Moreover, the average ratio of sold price to listing price in Jeffco was 100%, as it had been every prior September except in 2019, and the price per finished square foot has continued to soar. The situation is similar in all suburban counties.
Clearly, the takeaway from this analysis is that if a homeowner is thinking of selling their home anytime soon, he or she would be smart to put their home on the market right now. Don’t think that just because winter is coming that buyers aren’t actively looking for homes. Last week in this column I promoted a 1973 ranch in Arvada that was “not particularly updated.” It didn’t even have a garage door opener for its one-car garage, and it had a backyard clothes line instead of a dryer. Yet that home attracted over 50 agent showings in 72 hours and 11 offers by Saturday evening, when it went under contract for $30,500 over its listing price.
A recent real estate industry article predicted a terrible winter for us real estate agents because of low inventory, but there are just as many homes for sale as ever — maybe more. You just have to act quickly because they are selling right away.
Another recent listing of mine also illustrates how hot the market is. The very first offer for my $530,000 tri-level listing in central Lakewood came in at $585,000, apparently from a buyer who had lost out in previous bidding wars and didn’t want that to happen again. The strategy worked, because no other agents would submit an offer when they learned that we had one that was $55,000 over full price.
Are you wondering what you might be able to get for your home? It costs you nothing to get a comparative market analysis from a real estate agent, and, regardless of where your home is, my broker associates and I are happy to provide that for you. Call us!
As with politics, “all real estate is local.” News reports about the national real estate market going up, down or sideways may or may not apply to where you live. I don’t have the space to provide the stats for your subdivision, but I can certainly provide them for Denver and for the metro area using data from REcolorado, our MLS.
The charts below contain what I consider to be the most useful statistics for assessing the health of the real estate market in the City & County of Denver compared to the rest of the metro area, which I’m defining as within a 17-mile radius of the state capitol. That radius includes Aurora but not Parker on the east and southeast, Highlands Ranch but not Castle Rock to the south, Golden to the west, and Broomfield and Thornton but not Brighton or Boulder to the north. Basically, it includes most of what I consider urban and suburban Denver.
What we learn from these statistics covering the last five years is that the median sales price has continued to rise by a significant amount every year, both in Denver and the rest of the metro area. The same was true for the price per square foot except for a slight dip between 2017 and 2018 in Denver (and, by the way, in Jeffco) but not for the rest of the metro area as a whole.
The ratio of selling price to listing price has been on a steady decline in both charts, but the drop in 2019 was much sharper, sinking below full price. Meanwhile, the median days that it took listings to go under contract was pretty steady until 2019, when it surged by over 50% both in Denver and the rest of the metro area. The number of sold listings has remained steady for all five years, but notice the surge in expired (unsold) listings in both 2018 and 2019.
Now let’s look at how this December in Denver compared to previous Decembers:
In that chart you see that there has been an improvement over past years in every indicator except days on market and the number of listings that expired without selling. Median sold price and price per square foot are at record highs for December. The ratio of sold price to listing price is slightly higher than in 2018, although still under listing price. It will be interesting to see how January shapes up. As I write this on Monday evening, there have already been 125 closings of Denver listings and there were only 907 Denver listings under contract, so it’s not looking good for matching last January’s number of 1,665 sold listings.
Now, let’s look at the same analysis for Jefferson County’s real estate market.
What we learn from these statistics covering the last five years is that the median sales price has continued to rise by a significant amount every year, both in Jeffco and the rest of the metro area. The same was true for the price per square foot except for a decline between 2017 and 2018 in Jeffco, as in Denver, but not for the rest of the metro area as a whole.
The ratio of selling price to listing price has been on a steady decline in both charts, but the drop in 2019 was much sharper, sinking below full price. Meanwhile, the median days that it took listings to go under contract was pretty steady until 2019, when it surged by about 50% both in Jeffco and the rest of the metro area. The number of sold listings has remained steady for all five years, but notice the surge in expired (unsold) listings in both 2018 and 2019.
Now let’s look at how this December in Jefferson County compared to previous Decembers:
In that chart you see that there has been an improvement over past years in every indicator, including a drop in the number of listings that expired without selling. Median sold price and price per square foot are at record highs for December. The ratio of sold price to listing price is slightly higher than in 2018, although still under listing price. It will be interesting to see how January shapes up. As I write this on Monday evening, there have already been 93 closings of Jeffco listings and there were 549 Jeffco listings under contract, so it’s looking pretty certain that we’ll beat January 2018’s number of 553 sold listings.
Here at Golden Real Estate, we are used to having a pretty active real estate market during the winter months, but recent news reports suggested that the market has slowed dramatically, with sellers more reluctant than in the past to put their homes on the market. Statistics show that analysis to be overblown.
Below is a chart showing 6 years of June and November listing activity on REcolorado.com (Denver’s MLS) limited to the City & County of Denver. (Further down I analyze Jefferson County statistics.) December numbers are not available yet, so I’m only showing November activity. It’s not exactly winter, but the trend over 6 years is still useful for the purpose of this analysis.
What the analysis shows is that there was in fact an increase of sales during November over the previous year and nearly as many new listings. The number of active Denver listings in November was less than last year’s peak but still higher than the four previous Novembers. Both median and average days on market were only slightly higher, and the median sold price was much higher than last November. Moreover, the ratio of sold price to listing price was even higher this November than it was in November 2018. As for this month, there have been 384 new listings through Dec. 16th — exactly the same as during the first 16 days of December 2018.
In contrast to Denver and the full MLS, Jefferson County showed a slight slowdown in every metric except the number of sales and the median sales price, as show in these statistics garnered from REcolorado:
While the number of November closings in Jefferson County this year is comparable to previous years, the number of new and active listings this November is markedly lower than last year, and the median and average days on market are markedly higher. Despite the slowdown, the median sold price is higher—a new record for November—but the ratio of sold price to listing price is lower than all five prior years..
As for this month (through last Sunday) we have 257 new listings here in Jeffco, compared to 250 new listings for the same 15 days in December 2018, so that’s unchanged, but almost every agent I’ve spoken to senses a slowdown in real estate activity that is greater than we typically experience at this time of year.
As I’ve written before, winter is, in fact, a good time to sell a home, but it’s true some sellers continue to think otherwise. If a home is not overpriced, it can sell quickly in the winter months for a variety of reasons, the biggest one being that there is less competition from other listings, but there are countless buyers still getting alerts from the MLS, Zillow and other websites when a new listing matches their search criteria. Sellers also appreciate that only serious buyers ask their agents to show homes at this time of year. Lookie-loos are really a fair-weather phenomenon.
Call one of us at 303-302-3636 for a market analysis, including localized winter statistics. By the way, Golden Real Estate, although based in Jefferson County, is also active and successful in the Denver market. Please consider us when it’s time to sell or buy!
We Realtors are as surprised as anyone at the increase in home values, especially of the most expensive homes. The charts below speak for themselves. Not only are sales of million-dollar homes in Denver and Jefferson County increasing, but the time it takes such homes to go under contract has continued to go down.
Not shown in these charts is 2019, since we’re only 9 months into the year, but the number of sales for both counties thus far in 2019 is already about to surpass the sales for all of 2018, and the median days on market (DOM) is about the same as last year. Evidently, the number of sales over $1 million will continue to increase, while the days-on-market line may level off.
The number of sales of Denver homes over $1 million thus far in 2019 is 739, vs. 746 for all of 2018. The yearly increase in million-dollar closings has ranged from 9.2% to 40% over the past 5 years.
Those are the statistics for all of Denver. The figures for Denver’s four quadrants (divided from each other by Colfax and Broadway) present differing market trends, as follows:
It’s worth noting that two of the quadrants — northwest and southwest Denver — have already recorded a big increase in sales for 2019 over all of last year. And the other two quadrants are likely to top last year’s sales, since there are currently enough homes under contract to make that happen. At press time there were 125 Denver homes over $1 million under contract — 78 in southeast Denver and 13 in northeast Denver, most of which can be expected to close in coming weeks. There are another 323 active Denver listings over $1 million, many of which could also sell by year’s end.
The number of Jefferson County homes over $1 million sold in 2019 through press time was 235, vs. 242 for all of 2018. The yearly increase in million-dollar closings has ranged from 21% to 53% over the past 5 years. Those, however, are the statistics for all of Jefferson County. The figures for the four biggest Jeffco cities present differing market trends, as follows (Note: Golden stats are within city limits only):
Only Wheat Ridge is lagging in this trend of massively increased sales of Jeffco homes for over $1 million. The other three cities are beating the county trend. The days on market for these four cities varied significantly from each other and from the Jefferson County statistics.
For example, those five sales last year of million-dollar homes in Wheat Ridge had a median DOM of 298, while the 20 homes that sold last year in Lakewood had a median DOM of 25 and the 5 homes that sold in Golden had a median DOM of 89. The Arvada homes had a median DOM of 21 days. The 15 Arvada homes that have sold thus far in 2019 have a median DOM of just 14 days.
While the market for lower-priced homes does show signs of slowing, the market for homes over $1 million seems only to be strengthening. This may be a reflection of the Trump tax cuts which are known to have helped the ultra rich more than those in lower income brackets. That discrepancy has also evidenced itself in the rates for jumbo loans, which have been lower in recent years than the rates for conventional mortgages. When I checked on Sunday, Wells Fargo was quoting jumbo loans at 3.5% and conventional loans at 3.625%.
There’s a lot of uncertainty in the world right now, especially in the Middle East and on the domestic political scene, and I’m frankly surprised that the markets remain so stable. It will be interesting to see how things shake out in the coming months and how that impacts the real estate market.
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.