Denver metro real estate experienced another week of records. The number of homes under contract and average weekly sales price both hit new highs for week 33 of the year.
What appears to be a net gain in migration to the Denver area, plus continued historically low interest rates, spells no end in sight for the supply and demand issue in the Denver market.
The average weekly sales price of a detached single-family home in the Denver Metro market has risen 22.7% in the last 14 weeks, from $508,666 in week 19 of this year, now surpassing $624,000.
The average weekly sales price of all property types has risen 22.5% in the last 14 weeks, from $476,861 in week 19, now at $584,035.
Supply / Demand Gap
Last week saw an uptick in the number of new listings hitting the market by more than 19% over the last 3-year average, but demand continues to outpace market capacity, driving prices higher. 1,658 homes under contract last week is 45% higher than the last 3-year average and once again surpasses the number of new homes hitting the market at 1,580 further widening the supply/demand gap.
As evidenced by the chart below, improperly priced homes (usually due to poor home preparation) are seeing a rapid adjustment to price. Most agents will use a chart like this to tell sellers they will get less for their home if priced too high early on. That is NOT what this chart says. This chart simply states that sellers will likely end up adjusting their price if they start too high, not that they end up getting the wrong price for their home.
Condition, Price and Time
While prices are rising rapidly, sellers should still work hard at property preparation to maximize value when selling their home. 1) Condition, 2) price and 3) time are the three primary factors determining the sales price of a home (relative to the immediate geography). Anecdotally, lazy sellers and lazy agents are causing price reductions by throwing homes on the market without preparing them well and overpricing the home relative to its condition. Taking a little bit of time to prepare the property properly will positively impact buyer perception, thereby increasing the home’s perceived value and the resulting seller equity.