This 1,850-square-foot Denver home is priced at $308,500, very close to the average price of a home sold in the metro area in May.
The Denver-area housing market was hot in May.
The number of previously owned homes and closings rose by almost 24 percent from May 2011, while the average price of a single-family home closed last month topped $300,000 for the first time since 2007, shows a report released today. The number of unsold homes on the market dropped by almost 41 percent from a year earlier. The scant inventory has led to frequent bidding wars.
?This is the first full month of the prime selling season and it was a fantastic month,? said Gary Bauer, an independent Realtor, who released the report based on Metrolist statistics. ??Overall, we only have a three-month supply of inventory.?
Homes are selling fast. The average days on the market for all homes is 78 days, 27.7 percent lower than the 108 days a year ago.
Bauer used his southwest metro area neighborhood, Columbine Knolls, as a microcosm of the market. It?s about a 40-year-old subdivision with about 1,200 homes.
?It?s not what you call a high-appreciation neighborhood, but people who live there like it and tend to stay for a long time,? Bauer said. ?In May, 20 homes went on the market and 18 of them have been placed under contract. I?ve been talking to other Realtors and they are seeing the same thing.?
By the numbers, Bauer?s report shows:
- There were 5,908 homes placed under contract in may, 23.7 percent more than the 4,777 in May 2011. Contracts were up 4 percent from the 5,681 in April.
- There were 4,625 home closings in May, 23.9 percent more than the 3,732 in May 2011 and 18.9 percent more than the 3,891 in April.
- Year-to-date, there were 24,553 contracts signed, 23.2 percent more than the 19,937 in the first five months of 2011.
- Year-to-date, there were 16,956 closings, 14.9 percent more than the 14,755 in the first five months of 2011.
- The number of unsold homes on the market fell 40.8 percent to 10,591 in May from 17,888 in May 2011.
- The average price of a single-family home that closed in May was $307,896, 10.2 percent higher than a year earlier, when the average sales price was $279,443.
- The median sales price of a single-family home rose 12.2 percent to $258,000 from $230,000.
- The average price of a condo was $179,253, up 12 percent from $160,051 in May 2011.
- The median price of a condo was $144,330, up 16.8 percent from $123,525 in May 2011.
Nothing in the numbers surprised Lydia Lind, owner of One Realty.
?I put five deals under contract in the last week,? Lin said. ?They were priced from $260,000 to $645,00. They were in Aurora, LoDo, LoHi, Congress Park and Stapleton.
Lydia Lin has placed five homes under contract in the past week.
She placed a downtown condo under contract for the full asking price of $325,000. It was a condo that she had listed last year and there were no takers.
?After we couldn?t get the price he wanted last year, I begged him to rent it until the market got better,? Lin said. ?He?s been renting it for $1,750 a month and the lease is coming up. I put it on the market at the same price, with the same brochure, the same everything from last year. I sold it in one day and have two backup offers. It?s crazy.?
Scott Webber, president of Fuller Sotheby?s International Realty, said it would be hard to ask for a better market.
?Is this great news, or what? It?s just amazing. After four years of a down market, it is good to see such strong numbers.?
He said there is so much pent-up demand in the market, he doesn?t see the Denver area running out of buyers.
?If you have a job and good credit and are a qualified buyer, and you were ready to move into a new home, the only reason you wouldn?t buy today is if your home was under water,? Webber said. ?Interest rates are still at historical lows and people know that prices are only going one way ? up. ?
While rising prices might knock some people out of the market, it creates other buyers.
?The great thing is that as prices begin to rise, more and more homeowners are going to start having some equity in their homes and will be digging themselves out of a bad situation. That means more buyers. There are still concerns about the job market and the election and the economy. But I think when people have made the decision to move that is what they focus on and they kind of put the other issues to the side.?
David Binkowski, owner of Prudential Real Estate of the Rockies, said he has been telling his brokers for several months that the market has moved from a buyer?s market to a seller?s market ? with a caveat.
Buyers don?t want fixer-uppers
Homes have to be turnkey situations, especially with younger buyers.
?The younger demographic, especially, wants a home to be pristine,? Binkowski said. ?But if a home is clean, in good condition and in a good location, I would say it is a seller?s market. I have actually had some clients who were afraid to sell, because they were worried their home would sell so fast they wouldn?t be able to find another home to move into. When is the last time we ran into that? It?s been many, many years.?
David Simonson, of REMAX Professionals, said that he has a number of clients who have missed out on buying a home because they wanted to think about it for a couple of days. By the time they were ready to make an offer, someone else had snapped it up.
?We don?t want buyers to over-react, but we need to educate them that the market has changed,? Simonson said. ?It used to be that you could tell a seller you want him to do A, B, C and you would consider making a low-ball offer. No more.?
The Metrolist numbers seem almost too good to be true, he said.
?As busy as I have been, I find these numbers hard to believe,? Simonson said. ?But knock on wood. Home are selling faster than they were just a couple of months ago. Many homes are selling faster than the numbers indicate. The numbers include all of the distressed properties ? short sales and foreclosures ? that take longer to sell. A year ago, a third of the home sales were distressed sales. If you remove those from the mix, homes are really selling fast.?
Much of the sales activity is for homes between $300,000 and $600,000, he said.
?It?s not just the $150,000 homes that are selling, like a couple of years ago,? Simonson said.
He said people buying and selling in the same market are even willing to take a loss in order to snare a bargain at the other end.
?If you paid $300,000 for a home and it is down 20 percent, that is a $60,000 hit, which is pretty painful. But if you can turn around and buy a home that previously sold for $600,000 for $480,000, it looks pretty attractive.?
Bauer said the only surprise May?s numbers had for him was the continued dearth of inventory.
?I expected that we would have at least another 1,000 homes ? maybe another 1,500 homes ? on the market.?
Have a news tip or a real estate story idea? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee and 8z Real Estate.
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