October 2014 Denver Metro Real Estate Report

How is YOUR Market?

Amy [email protected]

Areas of Analysis

Now only reporting on the 7 Metro Denver Counties

Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson.

Most notable discrepancies are in the “counted” fields such as Active, Under Contract, and Sold.

Our numbers will report lower than Metrolist due to the difference in counties reported.

The Highlight Reel October 2014

36.6% of sold transactions went under contract in 7 days or less, and 48.6% sold for at or over their asking price.

There is only a 2-3 week supply of inventory for both detached and attached homes under $400,000.

Supply of inventory for attached dwellings dropped to 0.9 monthsor 27 days of inventory, this is an all time low.

Even as we approach traditionally slower months for market activity, record numbers are still being hit. October saw the highest recorded sales price for attached units at $233,260 and reported that 66.7% of listings in the market resulted in a transaction.

October’s Hot Topic- updated from September With the holiday season just on the horizon many

sellers are questioning if they should list and sell their home now or wait for spring of 2015.

5 Reasons NOT to wait to sell your home.

Many media outlets and newsletters are reporting a seasonal slow down. Inventory declined as to be expected however buyer activity remained constant making the seller’s market more extreme. The odds of selling with the decline in active inventory actually increased in October 2014.


1. New Construction is back, at least in detached single family. As the market improves builders are encouraged to develop

new properties. A record number of new start permits have been pulled in

Metro Denver for DSF homes in 2014. As these ‘shiny’ new homes enter the market they will become

an attractive alternative to buyers.


2. Interest rates are projected to inch up… even though rates declined at one point to 3.75% in October 2014. Whether moving up or moving down if a loan is required to obtain

your new home housing expenses will be more 1 year from now. Projected rates for spring/summer 2015 are around 4.5%.

Buying Power by Monthly Payment and Interest Rate

270,000

280,000

290,000

300,000

310,000

320,000

330,000

340,000

Interest Rate and Monthly Payment CalculationsAll caluculations are based off of a 30 Year Fixed Loan. These numbers are to be used for illustrative purposes only.

Alw ays speak w ith a licensed loan officer to be sure how much buyers w ill qualify for.

Tota

l Pur

chas

e Pr

ice

Pote

ntia

l, P

& I

$1,500.00 334,042 314,191 296,041 279,422

3.5% 4.0% 4.5% 5.0%


3. Timelines will be shorter There are fewer transactions this time of year making

timetables on each component friendlier for transactions in the next 90 days.

Consider the workload of: Lending companies Appraisers Inspectors Title Companies


4. Demand remains high While the media has reported a “slow down” in the real estate

market this only factors in the number of active and sold units,and not necessarily the amount of buyers still left looking fromthe competitive summer months.

The supply of homes vs. the number of buyers in the market, or the absorption rate has changed minimally as we transition to fall.

Homes continue to sell at a pace not seen since the mid 2000’s, between 2-3 weeks on the market.


5. Again, supply remains low Detached single family sits at 1.5 months of inventory Attached single family dropped back down to 0.9 months of

inventory. Especially in the attached market, with new build permits

hindered by the lack of new units being built this market continues to smolder.


Marketing post card available for purchase branded for you.

Can be purchased as electronic piece for social media or email.

Also available for printed advertisement.

Updating additional points to reflect October numbers. New card will be available on November 15th.

How much has the market shifted between the traditional peak selling season and now? Historically there is a measurable decline in the real

estate market with the majority of activity occurring in the months of May, June and July with less transactions in the winter months.

The traditional trend has been bucked over the last 2-3 years and 2014 is no exception.

The next slide will detail the difference between June and October 2014 to assist with overcoming the common thought that it is “bad” to sell in the winter months.

How much has the market shifted between the traditional peak selling season and now?

‐1%67.6%68.0%‐2%58.4%59.4%Odds of Selling

‐1%99.3%99.8%‐1%99.0%100.0%% of List/Sold Price

36%302244%3625Days on Market

4%$

233,260 $

224,492 ‐4%$

362,437 $

376,971 Average Price

‐10%0.91.07%1.51.4Supply of Inventory

(Months)

‐7%1,3291,425‐20%3,1663,949# of Sold Units

‐11%1,2551,413‐16%4,6335,513# of Active Units

% ChangeOct‐14Jun‐14

% ChangeOct‐14Jun‐14

Attached Single FamilyDetached Single Family

• Active inventory declined by -43.0 % year over year.

• Under Contract properties declined -22.4% vs. the same month a year ago.

• Sold units decreased from September 2013 by -12.0%.

Greater Metro Denver Detached Residential Market Activity

0

5,000

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Active

Sold

Under Contract

“Based on information from Metrolist, Inc. for the period 1/1/2006 through current. Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

• Inventory down by -13.5% from September.

• Under Contracts down -2.1% from one month ago.

• Solds down slightly by -1.9% vs. last month.

Greater Metro Denver Detached ResidentialMarket Activity

0

1,000

2,000

3,000

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10,000

Oct-12

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Active 8,108 7,336 6,366 5,843 5,541 5,445 5,662 6,738 7,558 8,286 8,787 8,635 8,121 6,500 5,670 4,178 4,141 4,203 4,485 5,150 5,513 5,820 5,819 5,354 4633

Under Contract 3,664 3,119 2,442 3,535 4,052 4,781 5,426 5,801 5,865 5,752 4,981 4,177 4,304 4,595 1,977 2,596 2,862 3,800 4,094 4,222 4,129 3,822 3,666 3,409 3339

Sold 3,246 2,975 2,725 2,343 2,363 3,493 3,798 4,540 4,433 4,857 4,386 3,714 3,598 2,455 2,575 1,795 1,977 2,583 3,049 3,583 3,949 3,837 3,488 3,226 3166

Oct-12

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Jul-14 Aug-14

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Oct-14

• Active inventory continues to hover around historic lows, down by -22.2% vs. the same month one year ago.

• Under Contract units up 12.2% from October 2013.• Sold attached dwellings up by 29% year over year.

Greater Metro Denver Attached Residential Market Activity

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,000

Jan-0

6Apr-0

6Ju

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Active

Sold

Under Contract

“Based on information from Metrolist, Inc. for the period 1/1/2006 through current. Note: This representation is based in whole orin part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

• Active condo units down by -7.0% from September to October.

• Under contract properties down -5.8% from month-over-month.

• Solds are down -1.7% from last month.

Greater Metro Denver Attached ResidentialMarket Activity

0200400600800

1,0001,2001,4001,6001,8002,000

Oct-12

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Oct-14

Active 1,611 1,511 1,340 1,260 1,245 1,237 1,283 1,476 1,629 1,739 1,800 1,713 1,613 1,450 1,327 1,183 1,174 1,138 1,169 1,360 1,413 1,537 1,459 1,349 1,255

Under Contract 960 774 648 896 981 1,195 1,429 1,451 1,555 1,654 1,249 1,160 1,148 1,256 645 993 1,023 1,473 1,533 1,582 1,579 1,536 1,584 1,367 1,288

Sold 849 717 675 610 604 840 916 1,125 1,133 1,247 1,327 1,016 1,030 745 737 583 730 944 1,106 1,387 1,425 1,437 1,366 1,352 1,329

Oct-12

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Oct-14

“What would a normal market look like?”

There is no normal, but we can make assumptions mathematically based on what “balanced” would look like.

A balanced market is defined by having 6 months of active inventory by the National Association of REALTORS.

The green bar indicates where the market would be with 6 months of inventory, vs. the red bar which is actual monthly active inventory levels.

• At current levels of inventory for detached properties, we only have 24.4% of the required inventory for what Denver would need to have a balanced market.

• The market is most heavily favoring a seller’s market in the under $200,000 range where Denver only has 9.1% of the required inventory.

Detached Residential October 2014Inventory Analysis Actual vs. Balanced Market

4633

177

1388

1425

649

329

586

18,996

1,950

11,820

3,576

888

372

390

0 2000 4000 6000 8000 10000 12000 14000 16000 18000 20000

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3M Projected ActiveActive

“Based on information from Metrolist, Inc. for the period show n in title. Note: This representation is based in w hole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any w ay responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

• At current levels of inventory for attached properties we only have 15.7% the required inventory for what Denver would need to have a balanced market.

• The market is most heavily favoring a seller’s market in the $0-$199,999 range where Denver only has 8.7% of the required inventory. This number has been declining even though we are entering what is typically considered a “slower” season.

Attached Residential October 2014Inventory Analysis Actual vs. Balanced Market

1255

389

361

271

136

39

50

7,974

4,464

2,646

516

192

120

36

0 1000 2000 3000 4000 5000 6000 7000 8000 9000

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3M Projected ActiveActive


• The buyer/seller ratio declined to 1.5 months of inventory.

• This is near the all time record of 1.3 months of inventory.

Greater Metro Denver Detached Residential Supply of Inventory in Months

0.01.02.03.04.05.06.07.08.09.0

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14


• By price band in Residential, the market is still considered a seller’s market up to 800k.

• Inventory levels are well positioned as we enter the highest selling months.

Greater Metro Denver Detached Residential Price Band Analysis October 2014- Supply in Months

1.5

0.5

0.7

2.4

4.4

5.3

9.0

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3M

“Based on information from Metrolist, Inc. for the period shown in title. Note: This representation is based in whole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any way responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

• Inventory a new all-time low.

• Supply dropped back to 0.9 months of inventory, down by 0.1 months from September.

Greater Metro Denver Attached ResidentialSupply of Inventory in Months

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• Extremely low levels of inventory up to $1,000,000.

• Again, levels are incredibly competitive even in luxury segments.

Greater Metro Denver Attached Residential Price Band Analysis October- Supply in Months

0.9

0.5

0.8

3.2

4.3

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All Price Ranges

0-199K

200-399K

400-599K

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800-999K

1M-3M


The Odds of Selling

A calculation based on all active, under contract, sold and expired listings in the market place.

This number is used to predict the likelihood of a buyer and seller agreeing to exchange a property in a specific month.

This number is not what people expect it to be. Can be used as a tangible measurement when

communicating the value proposition of using a real estate professional.

• Prior to the market recovery in 2012, the odds of selling in a given month hovered around about 25%.

• Previously the highest this number has measured in the last 7 years was in April of 2013 at nearly 60%. We hit 58.4% in October of 2014. This number has remained nearly constant for the last 4 months.

Greater Metro Denver Detached ResidentialOdds of Selling

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• Using the established benchmark of 25%, historically consumers can better understand where the ‘sweet spots’ in the market place are by pricing band.

• Even though the market is still considered ‘hot’, buyers are still sensitive to pricing and condition of homes. Some homes WILL NOT SELL.

Greater Metro Denver Detached Residential Price Band Analysis October 2014- The Odds of Selling

54.4%

74.3%

70.3%

42.6%

29.1%

23.0%

18.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3M


• The odds of selling prior to 2012 were about 23% for attached dwellings.• Highest odds of selling in the last decade recorded in April 2014 at 69.3%.• Current odds of selling in October 2014 were reported at 67.6%. This is up from the previous month.

Greater Metro Denver Attached ResidentialOdds of Selling

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%

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• Using the established benchmark of 23%, historically consumers can better understand where the ‘sweet spots’ in the market place are by pricing band.

• Even though the market is still considered ‘hot’, buyers are still sensitive to pricing and condition of homes. Some condos WILL NOT SELL.

Greater Metro Denver Attached Residential Price Band Analysis October 2014 The Odds of Selling

64.0%

75.7%

66.5%

36.5%

31.1%

42.5%

17.4%

0% 10% 20% 30% 40% 50% 60% 70% 80%

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3M


• Average sold prices still high at $362,437. Up 9.1% over prior year and down 0.5% from prior month.

• June 2014 saw the highest average prices we have ever recorded.

Greater Metro Denver Detached Residential Average Prices

$200,000$220,000$240,000$260,000$280,000$300,000$320,000$340,000$360,000$380,000$400,000

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• Average sold price up slightly from September to October by 7.9%, and up 13.9% from prior year. Currently sits at $233,260.

Greater Metro Denver Attached Residential Average Prices

$100,000

$120,000

$140,000

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$240,000

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• Average % of List/Sold price ratios demonstrated many competing offer situations in the residential market.

• Please note the properties between $0 and $400,000 are selling over 99% of their last asking price.

Metro Denver Detached and Attached Price Band Analysis October 2014- % of List/Sold Price

99.3%

99.3%

99.5%

99.0%

99.0%

99.3%

95.4%

99.1%

99.7%

98.6%

97.7%

97.3%

99.4%

95.7%

93% 94% 95% 96% 97% 98% 99% 100% 101%

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3MCondo

Residential


• Average days on market reached their lowest in June 2014 at 25.

• Currently sitting at 36 days, down -21.7% from one year ago.

• Historical average is usually between 90-110 days on market.

Greater Metro Denver Detached Residential Average Days on Market

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140

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• Average days on market by price segment is below average until the $400,000 range.

• Shortest average days on market is in the $0-199k and $200-399K segments.

Greater Metro Denver Detached Residential Price Band Analysis October 2014- Average Days on Market

36

19

27

50

85

96

110

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All Price Ranges

0-199K

200-399K

400-599K

600-799K

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1M-3M


• Currently days on market sits at a near low of 30.

• This is down 18.9% from one year ago.

•Near a record low, historical average is typically 100-120 days to contract.

Greater Metro Denver Attached Residential Average Days on Market

10

30

50

70

90

110

130

150

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• Average days on market in this calculation is slightly different than as reported by the MLS due to a variance in the way data is obtained.

• Just over 2 weeks to contract for properties under $200,000.

Greater Metro Denver Attached Residential Price Band Analysis October 2014- Average Days on Market

30

19

30

99

67

64

126

0 20 40 60 80 100 120 140

All Price Ranges

0-199K

200-399K

400-599K

600-799K

800-999K

1M-3M


• Pricing it right the first time proves listings will go under contract not only faster but also at a higher price, netting the seller more money.

• Highest % of original to sold price ratios occur in the first 2 weekends a property is on the market.

Metrolist Residential Sales October 2014 Days on Market vs. Original to Sold Price Differential

90.0%

92.0%

94.0%

96.0%

98.0%

100.0%

102.0%

0-7 Days 8-14 Days 15-21 Days 22-28 Days 1-2 Months 2-3 Months 3 Months orMoreTotal Days on Market

% o

f Orig

inal

Pric

e

“Based on information from Metrolist, Inc. for the period show n on graph. Note: This representation is based in w hole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any w ay responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

• October 2014’s Residential Segment remained nearly the same as the prior year.

• YTD numbers we are behind 2013 for closed transactions by about 11.33%.

Greater Metro Denver Detached Residential Month to Month Sold Listing Comparison

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2013 2,008 2,299 3,250 3,605 4,238 4,207 4,405 4,105 3,342 3,180 2,632 2,725 34,6392014 1,879 2,000 2,538 3,049 3,583 3,949 3,837 3,488 3,226 3,166 30,715∆% -6.42% -13.01% -21.91% -15.42% -15.46% -6.13% -12.89% -15.03% -3.47% -0.44% -11.33%

January February M arch April M ay June July August September October November December YTD As of October

“Based on information from Metrolist, Inc. for the period 1/1/2006 show n on chart. Note: This representation is based in w hole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any w ay responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

• Condos are up nearly 45% year over year.

• Up over almost 24.3% YTD.

Greater Metro Denver Attached Residential Month to Month Sold Listing Comparison

0

2000

4000

6000

8000

10000

12000

14000

2013 549 618 797 941 1,121 1,138 1,191 1,188 971 956 791 777 9,4702014 611 751 944 1,106 1,387 1,425 1,437 1,366 1,352 1,392 11,771∆% 11.29% 21.52% 18.44% 17.53% 23.73% 25.22% 20.65% 14.98% 39.24% 45.61% 24.30%

January February M arch April M ay June July August September October November December YTD As of October

“Based on information from Metrolist, Inc. for the period 1/1/2006 show n on chart. Note: This representation is based in w hole or in part on content supplied by Metrolist, Inc. Metrolist, Inc. does not guarantee nor is in any w ay responsible for its accuracy. Content maintained by Metrolist, Inc. may not reflect all real estate activity in the market.

What percentage of the market do distressed sales represent?

First of all, what is a distressed sale?

A property which is to be sold in order to pay arrears on a mortgage

As defined in the market from Metrolist: Short Sale REO-Lender Owned Government Owned (HUD)

• Percentage of distresses sales has dropped from the peak of 41% down to 3%.

• Distressed sales continue to wane. Banks are less likely to approve short sales.

• Now is a great time to reach back out to NED and previously denied short sales.

Greater Metro Denver Residential Sold Distressed Sales

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14

%Government Owned% Short Sale% Bank Owned


• Percentage of distressed properties in the Condo segment have dropped from a peak of 51% in January 2011 to current volumes of 3% in August 2014.

• This number continues to decline.

Greater Metro Denver Condo Sold Distressed Sales

0%

10%

20%

30%

40%

50%

60%

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14

%Government Owned% Short Sale% Bank Owned


Thank you!

Megan [email protected]

October 2014 Denver Metro Real Estate Report

Real Estate

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