Your Castle Real Estate
Call Us: 720-289-0260

Denver Market Update

Denver Market Update

Real Estate News – November 2017

The condo market, just like the single-family home market, has been on fire the past six years. Every metric I measure has shown an enormous demand from condo buyers and a shortfall of inventory from sellers. As you would expect, this has led to competing offers and fast-rising prices. Condo prices rose an incredible 12.3% in the past year.

What’s very interesting is that many people think condos are not as good an investment as single-family, detached homes. Or, that condo prices are less stable and fall faster and deeper than the prices of homes when the market drops. When a client tells me this (and they ALL do!), I just show them the data, because the data show this is not true.

If you look at the chart above, you’ll see the metro Denver condo sales from 1972 to the present. Remarkably, the price fluctuations over this 45-year period closely mirror the rises and falls in the single-family home market. What’s more, the condo appreciation over that 45-year period is 5.6% per year, just 0.7% per year lower than the home market – a rounding error.

Of course, the major difference in purchasing a condo is understanding the financial health and rules and regulations of the Home Owners Association (HOA). The effort to understand and qualify the HOA should be taken very seriously by anyone interested in purchasing a condo. HOA financial reporting can take some getting used to, but with a little effort, you can grow in your understanding of how it all works. Take a long view of the HOA’s finances. Yes, it is important to remain aware of the here-and-now financial health of an association, but it is equally important to think about any major, upcoming expenses that you know about. The balance sheet, for example, provides a cumulative, complete picture of the association. The current year’s equity reflected on the balance sheet is the net income or loss being added or subtracted for the year’s operations. The balance sheet is a picture of the association, reflecting its financial position at a specific point in time. It is categorized into three areas: Assets, Liabilities, and Members’ Equity. The three are always in balance, thus the equation: Assets = Liabilities + Members’ Equity. A bad HOA makes for a bad condo purchase, plain and simple. The good news is there are well-established metrics and rules to guide us in evaluating an HOA, so it’s not guesswork, it’s just work. And let’s not forget condos come with lots of advantages as well. They usually are more affordable than single-family homes, and all of the outside maintenance is taken care of by the HOA – a big advantage for many buyers.

Let’s look at a number of key metrics for condos to help understand the market better:

Average price: Prices have been up strongly in each quarter since 2010, rising another 12.3% since Oct. 2016. Smaller condos have generally experienced more price appreciation than large ones. I expect continued price gains in 2018 (range 7-9%).

Number sold: The number of condos sold rose 6% in the past year. Tight inventory has limited sales for the past several years, continuing to drive up prices. I expect modest increases in sales volume in 2018 vs. 2017 (+5% or so), as new construction continues to filter into the market. The problem for most buyers, though, is that the majority of the new attached construction is in the luxury market, priced well beyond what the average buyer can afford. So while we expect more units to come on the market, the average buyer will continue to see limited inventory for affordable condos and no end in sight to price rises across the board.

DOM (Days on Market): DOM has been flat since 2016, at a remarkably low 21 days. Ninety days is considered a “balanced” market where neither buyers nor sellers have the upper hand. Because inventory levels have been low for years, DOM has remained low as well. Simple “supply and demand” economics at work. I expect DOM in 2018 to stay near historic lows, around 2017 levels.

MOI (Months of Inventory): Six MOI is considered a “balanced” market where neither the buyer nor seller has the advantage. Currently, there is only one month of inventory for condos as condo inventory levels continue to be extremely low, especially for less expensive units. Low inventory has driven the nonstop condo price gains since 2012. Inventory will remain super tight next year in all but the luxury segment. Someday, increasing prices, an improved economy, and solidification of consumer confidence will bring more sellers (i.e. inventory) to the market but we believe we are years away from the equilibrium.

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.

If we can help you in any way, don't hesitate to contact us!


“This was our second transaction with Drew. He is extremely knowledgeable and professional. He kept us informed every step of the way. He streamlined the process so our stress level was greatly reduced. We will be using his expertise again and would recommend him highly.”

Dawn and Roy F.

“We currently live out of state and Drew made selling our home easy! He made sure everything was in order, he made sure that we knew everything that was going on and updated us with the progress of inspections, repairs etc. He went above and beyond what he need to. He knew the right price to price our home and we got full asking price!”

Chris and Jessica G.

Nothing short of excellent. He was friendly, professional, and always easy to get a hold of, even on vacation, whether it was by phone, email, or text. Despite the insane Colorado market, I snagged a place after making only 3 offers. When we offered on the house I bought, he suggested I disregard making an escalated offer and just make a strong, upfront offer with a lot of earnest money and an extra $7,500 in case of a low appraisal. We secured the deal after only two days. I have no intention o…

Peter T.

“Drew went above and beyond our expectations. He was able to provide us with valuable information about the areas that we were looking to buy in. What really impressed us most about Drew was that he took extra time out of his schedule to view homes that we were interested in, before we actually went out to view them together. His quick synopsis on these homes allowed us to eliminate certain homes from our list, enabling us to focus our attention on the homes that were a better fit for our life…

Steve and Tracy S.

“Drew sold our house at the speed of light for the price we were asking for. He did a terrific job seeing the sale through especially since we were out of state. I would recommend Drew without hesitation to anyone looking to sell or purchase a home.”

Pierre and Dawn S.

“I cannot say enough great things about working with Drew to sell my townhome and buy my new home. Drew is friendly, easy going, not only listens to what you want but hears you – numerous times in my search he noted a home didn’t have one of my non negotiable requirements as I tried to talk myself into a house. But with Drew’s guidance, at the end of a long search, I found my home and I could not be happier! Thanks Drew!”

Sarah S.

“Drew was great. I moved to Denver from Baltimore and Drew helped me find a home in a one weekend in a very hot market. His connections and expertise helped me beat out the other offers on my home and then secure some valuable concessions after inspection.”

Lynne M.

“Wow! Drew was so professional and really kept us in the know, especially after we moved. Since we had relocated to another state and left our home vacant, we were quite nervous. Drew sent us regular e-mails advising us of any showings, feedback or interest. When our offer came, his negotiation skills and advice were second to none. He did everything he could to make sure we sold our home for a price we needed. We would highly recommend him to anyone that is buying or selling a home.”

David and Tiffani F.

“My wife and I were both very satisfied with the way Drew marketed and handled the sale of our home in Colorado. The entire selling process was professionally handled, particularly the difficult issues.”

John and Paula Z.

“Working with Drew made the house selling process quite painless. He is very easy to work with and makes himself available at all times. He constantly kept us updated on the market situation in our area and always followed up. There was always constant communication, which is very important to me. I have worked with many Realtors in the past and Drew is by far the best of the best. Honestly, you can stop reading reviews. Contact Drew, I PROMISE you will not be disappointed.”

John and Kristin W.

Recent Blog Posts