Happy New Year!
What an unbelievable year for real estate in Greater Metro Denver! 2016 saw many new records for average sales prices, flash sales and near record lows for inventory. Looking forward to 2017, it’s shaping up to be teed off for another amazing year. Initial population growth reports show that in the last 12 months we’ve welcomed another 90,000 people to Colorado, Westword Newspaper- December 2016. With migration to Colorado near peak gains and new development unable to keep up, prices will continue to rise.
We are about to enter the “Market Compression” phase in our annual real estate cycle where demand picks up before homes are listed creating our early spring frenzy. In year’s past it was tied to the last game played by the Bronco’s and perhaps due to our shorter season it may be picking up as we speak and not waiting for our more typical Mid-February under contract bump. This creates additional challenges as inventory levels typically continue to fall through January. If demand picks up our compression phase of multiple offers, bidding wars and heightened flash sales could accelerate pricing earlier than expected in 2017.
Keep in mind that our appreciation for each year is set by June, with prices leveling out as we reach the warmer months of the year. Here is a quick snapshot of expected pricing gains as we push through 2017, as shown by month-over-month gains over the last 3 years. In plain-speak when the red line is above zero, prices are climbing month over month. When the red line is below zero, prices are dropping. Sellers who choose to wait to list their homes until summer months may miss out on the largest pool of potential buyers who will be out in masses February – April, if we have the same cycle as the last few years. And for buyers who are choosing to wait to search for their new home until the spring frenzy dies down after Q2, unfortunately will be faced with a whole new market value where we could easily see another 10% tacked on to current sales prices.
The above graph doesn’t account for the possibility of rising interest rates. We anticipate a heavier Q1 and Q2, specifically tied to interest rate increases as to when our market will taper off for this year.
This is also the typical month in which we would provide the by county breakdowns. CAR has an amazing report that we encourage you to review as it is much more extensive geographically than what has been done in the past: CAR Market Update- January 2017.
As always, thank you for your continued support. We appreciate the opportunity to provide insight into the marketplace, aiding you in getting more buyers and sellers under contract. We hope that if we are able to help you with more contracts that we will get to meet your clients at our closing tables.
Thank you for a fantastic year!