Special Thanks To Megan Aller First Amercian Title For The Following Report
Heading into the 4th quarter of 2019 we typically expect to see inventory and buyer activity decline. This year we are enjoying an extra bump of buyer activity due to low interest rates. Interestingly it’s taking some additional time for these units to make it from a contract being accepted to the closing table. In a closer look at the data we found that the time to close in the 2nd half of the year is longer than the 1st half of the year and we believe that is due to an increase in offers being written with contingencies. Good news for those buyers who need to sell before they can close on their next purchase, the opportunity is great to make a move before the holidays set in.
Detached Single Family:
• Active inventory for October down by -13.4% from the previous month and down -18.4% from the same month one year ago, 4,941. Contracts accepted also declined month over month by -3.5% but is up a significant amount, 11.6% from the same month one year ago, or 3,412 units.
• Days on market steady at 32 average days to contract, or 16 median days to contract. Both metrics continue to report at a slightly higher value than the previous 7 years in this cycle.
• Home prices usually peak annually in either May or June, this year the peak was in May and prices pulled back from June through September. In October the average sold price was $522,741 which is an increase by 0.7% from the previous month, and up 1.3% YOY. Median sold price was also up 1.1% from September, and still up 4.7% over the same month last year to $450,000.
• Close to list price ratio steady in October at 99.0%. Original to Sold price ratio was down from the last month at 97.2%. Both metrics are likely to decline through the end of the year giving buyers more negotiating power in the last quarter of 2019.
• Flash sales, or units under contract in the first weekend, consistent with last month in October. The number of units under contract in 7 days or less was 34.5%.
• 48.1% of homes closed in October sold for at or over their asking price.
Attached Single Family:
• Active down from the previous month in October 2019 to 2,463 units for sale. This represents a 7.0% increase over the same month one year ago. Contracts written are also up YOY, by 10.8% or 1,351 units. Even with increasing inventory, buyer demand continues to favor the seller.
• Days on market were constant holding at 35 average days to contract or 18 median days to contract. Days on market are up YOY 40.0% and 38.5% respectively.
• Average sold price up MOM by 3.1% to $361,553- however the median sold price was down from last month to $300,000 by -3.2%.
• Close to list price ratios steady at 98.9% of the last asking price.
• Flash sales, or units under contract in the first weekend declined MOM in October to 30.4%. This metric will continue to ease into the end of the year.
• 47.6% of homes sold in October sold for at or over their asking price.
While the numbers listed above represent the market, it may feel differently depending on which part of the city you are in. To give a reference of how your area compares I’ve finalized the zip code maps for each metric benchmarked against the current average value so that you can see how your negotiating power may shift depending on zip code level data. Don’t forget to check out the addition of zip code data to each section to see how your clients are affected by their zip code. Here’s a snapshot of where we are currently most deficient of listings, as a zip code turns blue this indicates a lack of inventory below the average in Denver, vs. red zip codes trending closer to a market in equilibrium which would occur when the value hits 100%.
Some final notes about what to expect listing around holiday season. Extended weekends and family time take precedence over buyers searching for their next home. Foot traffic will be lighter in open houses, showings will pull back to their lowest point of the annual cycle, ultimately the fewest contracts are written over the next few holidays. For the week of Thanksgiving, contracts accepted usually drops by 70% below other weekends in November. The week between Christmas and New Year’s Day reports the lowest contracts accepted of the entire year. While listing during these weeks are likely to lead to longer time on market for sellers, buyers will enjoy some of the least competitive weeks to make a purchase which increases their negotiating power.