Denver Home Prices Could Rise 5% in Next Year
My Observations and Thoughts—
- The number of new listings is basically flat over the last 2 years. Whereas, earlier this year the number of new listings was still increasing year over year. This is no longer happening.
- Under contracts increased a whopping 23% last month after rising 16% in August!!! Buyer demand is GROWING!
- This was the highest amount of under contracts in the last 5 years by a sizeable margin of 6.5% to 23%.
- In August attached home prices rose much more substantially than did detached home prices. But, in September this reversed. Here’s possibly why. First, solds of detached homes rose 10.6% in September; whereas they dropped by 3.3% in August (year over year numbers). Second, new listings of detached homes dropped in September by 1.2%. Thus, less supply plus increased demands = higher prices.
- While solds were up substantially in September from last year with 4,452 solds, in 2015 and 2016 sales eclipsed 5,000 or 11% higher.
- Since September 2015, average sold prices have increased by 33.5% from $354k to $473k.
- Since September 2015 median sold prices have increased by 34.8% from $306k to $412k.
- Buyer demand is increasing substantially as measured by under contracts due to lower mortgage rates; but new supply as measured by new listings is barely increasing now. Thus, inventory levels will begin to tighten and I expect price appreciation will increase.
- CoreLogic agrees and is predicting that home prices nationally will rise by 5.8% over the next 12 months due to better affordability thanks to lower mortgage rates.
- I think Denver home prices may increase by 5-6% as well in the next 12 months as long as mortgage rates remain at 4% or less.
- Thus wating to buy your new home because of fears of a recession could easily cost you over $25,000.