Highlights:
DMAR, Denver Metro Association of Realtors, releases August report.
DMAR finds typical seasonal cooling last month.
DMAR reports there is still less than a 2-months of inventory on the market.
A snapshot of the Denver-area housing market. Source: DMAR.
What has been a red-hot, housing market in the Denver area, experienced a little less heat in August, according to a report released today by the Denver Metro Association of Realtors.
But last month’s market showed a typical seasonal slowdown, even though it may feel like it cooled more than it did.
“I just think it’s more noticeable due to the frenzied pace we experienced earlier this year,” said Anthony Rael, chairman of DMAR’s Trends Committee.
“Any slight change, one way or other, feels more significant than it really is,” Rael added.
In fact, by one metric, the number of sold homes, last month was a fairly strong August.
“A seasonal drop is expected and keeping things in perspective, last month was still the third highest (August) for sold properties since 2007,” Rael said.
There were 5,088 single-family and condo/townhomes sold last month, a 3.4 percent drop from the 5,267 in August 2014 and a 15.3 percent drop from 6,005 in July.
As is typical, the market hits its “high-water mark,” in June and “overall things are definitely cooling,” from that point, according to Rael.
“The home selling season peaked in June, so it’s essential for sellers to re-adjust their expectations or they will encounter buyer resistance,” Rael said.
Prospective buyers have a bit more choice than they had during the summer.
There were 7,587 homes on the market in August, a 1.6 percent increase from the 7,470 in July, but a 6.7 drop from the 8,119 in August 2014.
Even the slightest bump upward can be very noticeable in a tight market like the greater Denver area, DMAR noted.
“Inventory levels will continue increasing slightly as over-priced properties begin competing with new appropriately priced listings, and prices will likely remain neutral,” Rael said.
“As our months-of-inventory inches up, it moves us closer and closer toward a more balanced market,” he added.
Listings and sold home snapshot. Source: DMAR
Still, there is less than a two-months supply of unsold homes on the market, which is considered a seller’s market.
At the end of August, there was a 1.7-month inventory of unsold homes on the market, which equates to 7.4 weeks.
In July, there was an inventory of 1.56 months, or a 6.8-week supply.
An inventory of three to five months is one that is considered balanced between buyers and sellers.
Some 5,383 homes were placed under contract in August, almost a 9 percent increase from the 4,940 in August 2014, and a 1.84 percent dip from 5,484 in July.
The average price of all homes sold in July was $365,369, 11.43 percent more than $327,904 in August 2014 and a mere 0.07 percent increase from $365,108 in July.
The median sales price last month was $315,000, up 14.6 percent from August 2014 and up 0.64 percent from $313,000 in July.
Meanwhile, apartment rental rates have skyrocketed at three times the national average so homebuyer demand will remain high – especially with homes priced $350,000 and below, according to Rael.
Recent volatility in the stock market most likely means The Federal Reserve will keep interest rates unchanged for the coming months, according to Rael and many other observers.
The DMAR report found that 6,416 new listings came on the market in August, 5,383 homes were placed under contract and 5,088 homes sold and closed.
Snapshot of new listings: Source: DMAR.
Month over month, there was a significant decrease in new single family listings of 15.5 percent while the average and median sold prices remained relatively unchanged from July.
The supply of condos dropped 11 percent from July, while the while the average sold prices ticked up by 0.77 percent to $256,046.
A record $13.5 billion in homes have traded hands through August, a 14.3 percent increase from the $11.47 billion tally for the first eight months of last year.
Year-to-date, a total of 48,970 new listings have hit the market, a 3.8 percent increase from the 46,186 new listings in the first eight months of 2014.
“As businessman Allen Klein once said, ‘a little perspective, like a little humor, goes a long way.’ Without question this market has caused everyone to lose a little perspective,” Rael said.
“Home sellers were happily cashing in as prices were peaking in June and homebuyers were frantically making decisions that weren’t always in their best interest,” Rael said.
Snapshot of Days on Market. Source: DMAR.
The report also found that in August, 105 homes closed for $1 million or more, up 19.3 percent from 88 in August 2014, but down 9.5 percent from 108 luxury sales in July
The closed dollar volume last month for luxury single-family homes and condos was $143.8 million up 14.7 percent from $124.6 million in August 2014, but down 15.7 percent from $168.4 million in July.
The average sales price per square foot for a luxury home in August was $251, down almost 2 percent from a year earlier, and down 7.5 percent from July..
“As the price ranges go up, the market activity goes down, but things are still good when looking at the bigger picture,” said Jill Schafer, a member of DMAR’s Market Trends Committee.
Luxury properties, however, sold in an average of 92 days in August, compared with 112 days in July.
Year to date, the number of luxury single family homes sold were up 23 percent compared to year-to-date last year, and were up more than 30 percent from year-to-date 2013.
Luxury homes this year sold for $5 more per square foot than in 2014 and $13 more per square foot from two years ago.
”So, it’s still a rosy picture when looking at the overall trend of the luxury market,” Schafer said.
“Homebuyers had the most choices in the luxury price ranges in January with 16 months of inventory in single family homes and 24 months of inventory for condos,” said Nicole Rufener, a member of DMAR’s Market Trends Committee
Inventory levels have dropped since January until August, when they rose to nine months of inventory for single family and 10 months of inventory for condos.
“Compared to January’s high inventory figures, these August numbers look pretty good, but it’s still a buyer’s market for homes priced over a million,” Schafer said.
A report released on Thursday by REcolorado showed a similar trend as DMAR’s analysis showed.
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.
Related Posts:
$8 billion and counting
DMAR: Home sales cool in August
DMAR: New listings surge in July
CAR: Home prices rise, inventory plunges
REcolorado: Record year ends with 6-week supply of homes
The post DMAR: Seasonal cooling in August appeared first on Denver Real Estate Watch.