Welcome to the real estate market Quarter One report! Here is what we are seeing in today’s real estate market.
Average Home Price: The average price of a single-family home in metro Denver leapt another 5.2 percent in the past 12 months. In March of this year, the average metro Denver home sold for $517,897, a 4.6 percent price increase from the beginning of the year. This matches the prediction I made in January of a 4-7 percent price appreciation.
Inventory: Inventory right now is a very interesting story. Since December 2018, inventory levels have essentially flatlined, hovering at around 9,700 active listings. The number one driver of home price change is the amount of inventory on the market, which helps to explain why the average price of a single-family home has increased. Again, it’s simple supply and demand. Supply has stayed steady, but demand continues to increase, so consequently, prices increase as well.
Number of Homes Sold: Because there is so little inventory in our market the number of single-family homes sold is actually going DOWN year over year, not up. There were 6.7 percent fewer homes sold in March 2019 than March 2018 simply because there is so little inventory on the market.
The Investor Market: Denver is still a great place to invest in real estate. The fix and flip market is strong 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 because of the lack of competing inventory. The buy-and-hold market will continue to be extremely profitable for long-term investors. Interest rates and vacancy rates are still near record lows and rents continue to increase. It’s not difficult to buy a rental property in today’s environment and put it on the path to be paid off in 13-15 years. Just think how your life would change if you owned a couple of rental properties free and clear! For building long-term wealth it’s tough to compete with rental property ownership. That is the one thing that will never change.