Denver housing inventory
Denver housing inventory drops 24.89% in December to 3,864 active listings, according to the latest report from Denver Metro Association of Realtor. Active listings for November ended at 5,131, which was a record low in Denver housing inventory. That compares to 5,420 in November of 2014, which was the previously recorded low for that month. For context, the average active listings for November are 15,232 (1985-2016), and the record-high November was 2006 with 27,530 listings. The lowest recorded inventory number was 3,878 in February 2017. If this current trends continue, we could see inventory below 3,800. The number of homes sold decreased by 13.51% compared to the previous month, however it is up 3.28% year-to-date compared to last year.
Year-to-date, the number of homes sold set a new record as we closed out the year at 57,788 homes, up 2.93% from 2016. The 2017 year also set a new record in closing volume, which totaled $25 billion. In 2001, the total closing volume was $9.9 billion. The average price for a single family home was $480,140 and the average price for both single family and condos was $443,848, an increase of 8.31% year-over-year. Year-to-date, the average sold price for condos was $318,904, up 10.01% from last year.
In the luxury market, which is homes priced at $1 million and above, 168 homes sold, compared to last year’s 95.
The demand for new homes in the Denver area exceeds 16,000 units, according to the data from DMAR, however, new construction is estimated at 13,000 units.
Investors push into a resurging market of flipping houses. House flipping, which declined after the financial crisis in 2008, is on the rise again, thanks to low interest rates and rising home prices. Last year (2016), 5.7% of all home sales were flips, the highest level since 2006, according to Attom Data Solutions. House flipping requires fast access to money and investors are willing to pay higher interest rates for it. The loans are backed by the property and are short, typically running for a year or less. Typical interest for such loans are around 8% and the average loan-to-value ratio in the industry is about 55%, compared with 75% to 80% for a typical mortgage.
Broomfield County saw one of the greatest increases in gross rent nationally, according to a recent study form the U.S. Census Bureau. Over a five year period, the increase was $312 – from $1,105 to $1,417. To put that figure in perspective, the nation overall saw a $21 increase in the median gross rent. According to Broomfield’s 2017 mid-year economic update, the average apartment rental rate rose 2.7% year-over-year to $1,545 per month, while metro Denver’s rose 3.6% to $1,420.