Housing markets can be drastically different in various parts of the United States, which is why we think it's really important to keep a close eye on what's happening in the Denver Metro Area. The Denver Metro Association of Realtors releases it's most recent area data monthly, and the numbers continue to reassure would-be Denver area home buyers and realtors alike.
Take a look at the numbers that show we are not on the edge of a Denver housing bubble:
September saw 3% fewer new listings than September of 2016
One prominent reason for home price inflation over the past several years is the fact that Metro Denver has a listing shortage. That means that people who want to buy homes far outweigh the number of homes on the market. With a year over year decrease in new listings (and no slowing in sight of new Denver residents), that listing shortage is very likely to continue. Just like with any product shortage, this means that home values will continue to rise. Remember the avocado shortage of 2016? Those delicious green guys cost an arm and a leg!
Homes under contract have gone up by 6% since this time last year
This metric is very straight forward: people are buying homes at an even higher rate than last year. No one can argue that September of 2016 brought about a bursting real estate bubble in Denver, so we're on a great trajectory for the rest of 2017 and beyond.
September of 2017 and September of 2016 matched each other for days on market
The past few years of Denver's booming real estate scene have seen record low days on market, demonstrating the lightning fast pace of the home buying process. Buyers are competing with one another and jumping in two feet at a time to get the home their heart is after! And, nothing has changed. Homes are spending an average of 32 days on market, just like last year.
The average sales price for homes has increased by almost 9% since September of last year!
And finally, the average sale price for homes in the Denver Metro area continues to climb, clocking in at $429,597. This is almost 9% above where it was at this time last year! Full discloser: the number has dropped by a fraction of a percent (0.5%) since August. But this slight price drop is to be expected this time of year. In 2016, the average home price dropped by 1.4% from August to September. See, completely normal data for a healthy market!
Why Year Over Year Data?
You'll notice that all the data points listed above are as compared to this time last year. And, it's for good reason. Real estate typically sees a bit of a cool down in late summer and early autumn. Numbers tend to go down or stabilize just about every year around this time, so comparing numbers month over month can create unneeded stress in the already pressurized situation of home buying. According to Denver agent, Ryan Belinak, "Even as things cooled, the Denver market remains robust with low inventory pushing prices higher."
So, to answer the question, "are we on the edge of a Denver housing bubble?"...
Although we don't have a crystal ball in which we can see the future, we do have the Magic Eight Ball of year over year data and stable trends to ease our minds. And, the Magic Eight Ball says, "very doubtful". Denver real estate trends do not indicate that we are in a housing bubble that is about to burst.
If you are curious about how this information might impact your current and future home investments, please don't hesitate to contact us. We are here to help with whatever you might need.