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Denver Market Update

Denver Market Update

Real Estate News – January 2018

Now that the holidays are over it’s the perfect time to peer into my crystal ball and forecast the 2018 real estate market, so let’s jump right in.

1. Average Home Price: The average price of a home (single-family, condo, and townhome) in metro Denver increased another 8.8 percent in 2017, finishing the year at $443,520. I believe 2018 will be another strong year for our housing market with an average price increase of 6-8 percent because the number one driver of home price change is the amount of inventory on the market, and inventory remains historically low.

Let’s look back over time to get a better perspective and learn from our history. In 2007 during our last downturn, we had a peak of 31,000 properties on the market so prices DROPPED 14 percent, while in 2017 we averaged fewer than 7,000 properties on the market so prices ROSE 8.8 percent. It’s simple supply/demand. For the past several years we have had record low inventory with absolutely no sign of it increasing. Until it does there will continue to be tremendous upward pressure on prices as demand continues to outstrip supply. Where will the new supply of home inventory come from? It won’t be bank-owned properties or short sales – our metro Denver economy is as strong as it’s ever been and a strong economy means almost no properties on the market. The additional supply will eventually come from homeowners who finally decide to start moving again. But when this will happen is anyone’s guess.

Part of the issue is an interesting Catch 22 where many potential sellers evaluate the market and think they can’t find their dream home because of the lack of inventory – therefore they don’t put their homes on the market – thereby contributing to the very lack of inventory that stopped them from moving in the first place. I frankly don’t see any reason to think this will change anytime soon. Low inventory and rising prices are here to stay for the foreseeable future.

2. Number of Homes Sold: There was a very small increase in the number of single-family homes sold in 2017 vs. 2016 of just 3 percent. So while prices rose strongly, the number of sales barely budged because there was so little inventory on the market to buy. I don’t foresee any dramatic change in 2018. I expect a 3-4 percent increase in 2018 home sales, if only because our Denver metro population is rising over 1 percent per year and all these people need to live somewhere!

3. The Investor Market: I think the real estate investor market will remain strong with very little change in the outlook. The fix and flip market will continue to be profitable for those who can find underpriced homes to buy and repair. They’re out there but it takes tools, patience, and work to find them. Once you get one fixed up, selling is the easy part due to the lack of competing inventory. The buy-and-hold market will continue to be extremely generous to long-term investors. Vacancy rates are still near record lows and rents continue to increase, up over 40 percent in the past 5 years! It’s not difficult to buy a rental property in today’s environment and put it on the path to be paid off in 12-13 years. For building long-term wealth it’s tough to compete with rental property ownership. That’s the one thing that never changes!

Let us know how we can help you reach your real estate goals in 2018!

Thank you!

As always, we’d like to take a moment and say thank you for your business and referrals. Every client is special to us and it’s a pleasure and a privilege to serve your real estate needs. Please feel free to contact us anytime if you have any questions or thoughts about the real estate market.

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Testimonials

Super awesome!! He helped us with everything we needed and did awesome getting the job done! This was our first time purchasing land and Drew gave us all the info we needed to know.

Austin O. and Alex J.

“Drew was patient and listened to our needs. He gave us important information and advice to make an informed decision. He looked out for us even up to our very closing day…and even after we can continue to ask him for help finding contractors or other repair persons.”

Astro and Elsa M.

“Drew went above and beyond the call of duty throughout the entire process. If we know of anyone who needs to buy or sell a home, we will definitely recommend Drew!”

Tim and Jen K.

jpeg-5.jpg“Working with Drew and his team was a very positive experience. In fact, they were so good, I will always turn to them as my real estate professionals! I was a bit nervous about their knowledge of my area when we started the process as they aren’t located directly in Castle Rock, however, Drew said they knew the area and I trust Drew. As it turned out, they really knew the area! The neighborhood research provided was accurate and the sale price they suggested was exactly on target. Our house so…

Laura and Phil H.

“From the start, Drew did a great job listening to our ‘wants’ for a house and taking them into account. We appreciated how proactive he was in offering alternative properties to our original list of homes. He was extremely patient throughout the entire process. He knew how best to go about making an offer and his knowledge of the market ensured that our offer on the house was accepted. We may have put a slight strain on the process by bringing in our own inspector, but in the end, it work…

Danielle and Sean C.

“Drew was excellent regarding his communication. I thoroughly enjoyed working with him. He was dedicated to giving me every piece of information along the way!”

Donna R.

“Excellent. Drew was very good at communicating with me during the entire process. He also went out of his way to help when things came up since I do not live in Denver. Everything went better than I thought it would.”

Julie C.

“The level of service Drew provides far exceeds many other Realtors with whom I have worked. He had my house listed 24 hours after I spoke with him, and had over 7 showings the first week. I was selling a house we were remodeling and Drew had it sold before the carpet was installed. Amazing experience!!!!!!”

Tom D.

“If you are looking for a realtor who will go the extra mile to make sure your house sells, look no further than Drew Schneider. Drew gave us a complete assessment of our homes value, made recommendations on what we could upgrade to obtain the most value on re-sell and did everything from start to finish. Drew had our house on the market within days and had it under contract in a week for above asking price!

Drew understands the housing market and is a realtor you can trust. He always responded …

Nate and Mandy B.

“Drew is a trustworthy professional whose experience, success and drive are virtually unmatched. He is a great listener, who provides insightful advice for all of your real estate needs. Because I’m one of Drew’s long time clients, referral sources and friends, I would recommend Drew to anyone.”

Greg and Nichol S.

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