Denver Metro Real Estate Market Update
2019 Quarter 1
We may be looking at a perfect storm for residential real estate. Individuals in the buying or selling process stand to gain from our current conditions. Let’s take a deeper dive in this Quarter 1 Market Update.
What are the numbers?
Total home sales down 7% versus March 2018
Pending Sales up 6%
Total sales up 20% from February to March
DOM down 20% MOM, but up 2% YOY
Active inventory = 6,292 homes, or approximately 6 weeks
Putting it all together
The market is healthy.
It’s healthy for sellers, and it’s healthy for buyers. One can easily get caught up in the message of the moment, or point to one figure or another as a sign of the coming future, but the simple fact remains that our current conditions are good for individuals in either situation.
Sellers will want to pay attention to inventory as it is climbing. Comparing March 2018 to March 2019, there are 6 weeks of inventory currently on the market, versus just 4 at this time last year. Yes, that means a 50% increase in homes on the market, but we are still under two months total. A balanced market is considered 5-7 months of inventory, so we are still very much in a seller’s market. Look to an increase in average sales price of 4% month-over-month as further evidence of your advantage.
Buyers, now is the time. Interest rates on a 30-year mortgage are back down to around 4%. Earlier in Q1, you could have found them as high as 4.75%. Banks want that rate to be as high as they can while remaining competitive. The reduction is a response to lower home sales during 2018 Q4 and a slow start to Q1; however, with month-over-month sales increasing over 20%, you can expect those rates to start heading in the other direction. Buyers will also be able to take advantage of more choices in the coming months. Active inventory being up nearly 5% compared to February means more homes are coming on the market every day.
We have what would appear to be conflicting information in the data sets, but it can be summed up this way: the market’s rate of increase has decreased. Looking at year-over-year numbers, the total number of sales are down, DOM are up (albeit by just one day), and active inventory is up by two weeks. On the other hand, the month-to-month numbers, which is more indicative of the way things “feel,” show us that 20% more homes sold in March than February, and for a higher average sales price.
Real estate planning always boils down to your unique goals and challenges. If you need to talk to a professional about the specifics of how today’s market impacts you, give us a call today.