As the Colorado real estate market continues to evolve, a report released Friday by LIV Sotheby’s International Realty, demonstrated prominence and growth in the Denver metro and Boulder real estate market in 2017. In response to the Colorado real estate market performing differently than the national average, the brokerage compiles quarterly micro-market data for the residential areas it serves. In 2017, despite consumers encountering several economic variables that have historically proven to affect market trends (namely the presidential election and rising interest rates), Colorado’s local real estate market remained strong, demonstrating increases in sales and price values throughout Denver metro, Boulder and beyond.
“Low inventory and appreciating home values were leading drivers of the 2017 real estate market, which is continuing at a strong and competitive pace as we transition into the new year,” said LIV Sotheby’s International Realty president, Scott Webber. “With Colorado continuously gaining notoriety nationally, and internationally, as an excellent place to invest, demand for Colorado real estate will likely increase in 2018.”
LIV Sotheby’s International Realty’s year-end micro market report compares January through December 2017 year-end statistics, to those of 2016, for single family homes and condos. Interestingly, market trends tend to vary dramatically throughout Colorado, which is evident when comparing the results of Denver and Boulder’s residential real estate markets year-over-year.
In Denver metro, while the total number of homes sold in 2017 held at about 54,000 year-over-year, the increase in the overall total dollar volume sold of 9.7%, was due nearly entirely from price increases, indicating appreciating home values and still-competitive conditions in the marketplace.
New listings to the market decreased in 2017, and the inventory of available listings was very low. This imbalance of supply versus demand has created the rapid gains in value enjoyed by homeowners, but has also made choices and affordability a challenge for buyers. This trend exemplifies the classic, “seller’s market”, with average days on the market holding at just 24 year-over-year, and a sold-price to list-price ratio of 99%.
Despite growth in price appreciation and total dollar volume sold, economic issues like low-inventory and lack of new construction remain challenging for the Denver metro real estate market. The skilled labor market remains incredibly tight, and the construction industry is one of the few sectors of the economy that has not rebounded, however Denver metro still experienced substantial growth in 2017.
Several micro markets demonstrated increases in average sales price in excess of 15% (Bonnie Brae/Belcaro, Bow Mar/Bow Mar South, Cherry Hills Village, City Park, Country Club, Crestmoor, Downtown, Hilltop, Observatory Park, Platte Park and Washington Park West), and many micro areas experienced 30%+ increases in highest sales price (Capitol Hill, Cheesman, City Park, Country Club, Downtown, Heritage Greens, Hilltop, Lohi, Lone Tree, Observatory Park, Sloan’s Lake and Washington Park West).
The report concluded that while high-quality and excellent-condition homes are rewarded greatly in today’s market, homes that are inappropriately valued tend to linger, and may have to go through a price drop in order to sell. Buyers should be prepared to act fast and make strong initial offers, and sellers should not be complacent regarding the selling condition of their home.
In Boulder, market conditions differ. Strong employment and net migration has created a market where demand seems to constantly outpace supply, resulting in a fast-moving and competitive “seller’s market” in most areas. Double digit appreciation rates were the norm in 2015 and 2016, but in 2017, there were some signs that the rise was slowing.
“County-wide, there were 4,700 total listings sold, up 9.2% year-over-year,” said David Carner, LIV SIR managing broker, Boulder. “Total dollar volume sold was up 10.2%, and stood at $2,831,136,763 at year’s end. The average price was up only 3.9%, to $602,498, and several micro markets saw a decrease in average sold price as well as highest price sold. These are imperfect indicators of appreciation because of the small sample size, but other indicators lend credence to the theory that the rapid gains of the past two years have started to wane, as evidenced in Boulder’s average list price to sales price ratio, which is down to 98.6%.”
The Boulder-area MMR indicated that certain micro markets performed better than others. Both downtown Boulder and North Boulder were down in average price and highest price sold; both markets that have traditionally led the pack in those statistics. Markets with the greatest gains in average price and overall sales volume were Louisville, Lafayette, Longmont and the communities of eastern Boulder County. All hovered around increases of about 10% in average sales price.
The Foothills communities saw a decrease in average sales price of 11.3%, and the highest price sale dropped to less than half of the highest sale of 2016. Similarly, the Mountain and Canyon Communities saw decreases in highest sales price, and fewer sales. This “dual market” scenario shows that there are distinct preferences in the marketplace that are driven by the convenience and amenities offered by the more urban and suburban properties of eastern Boulder County, rather than the views, privacy and space of the more rural and dispersed mountain communities of western Boulder County.
Overall, the Boulder real estate market remains one of the most desirable places to live in the country, with an 8.76% appreciation rate for the last twelve months, and 58.29% for the last five years.
Perhaps some of the most unique real estate markets, are those located in Resort communities throughout Colorado.
Comparing January through December 2017 statistics, to that of 2016, for single family homes and attached dwellings in Eagle County, LIV Sotheby’s International Realty’s year-end Vail Valley Micro Market Report, indicated completive conditions in the marketplace.
The number of single family homes sold rose 5.8% year-over-year, with average days on market decreasing 9.5%, from 137 days in 2016, to just 124 days in 2017, an excellent time frame for the resort market where homes typically stay on the market longer. A significant increase, is the 11.8% increase in average sales price year-over-year, demonstrating consumers’ willingness to pay more for homes they truly desire, especially at the higher end of the market.
An important statistic to note, is that private, (and sometimes, eye-popping) sales take place off-market (outside of MLS), that can influence the market. In 2017, two significant off-market sales took place; the sale of 332 Mill Creek Circle, that sold in August for $14,600,000, followed by the $28,700,000 sale of 395 Mill Creek Circle, that took place just days later.
The Summit County (Breckenridge, Keystone, Copper) real estate market also delivered positive results in 2017.
The number of sold listings increased 6%, from 1,862 listings sold in 2016, to 1,973 listings sold in January through December 2017. The average sales price in Summit County also rose, up 16.8%, from 2016. Across the board, days on market dropped 22.5% year-over-year, from 80 days in 2016, to just 62 days in 2017, an excellent time frame in a resort market, where homes typically stay on the market longer. The statistic of the number of days a home in Summit County remains on the market averaging just two months, demonstrates extremely competitive conditions in the region’s highly desirable marketplace.
Highlights from the Summit County area include the average price of Frisco’s single-family homes rising to $1,074,545, up 25% from 2016 and Keystone’s average price of all properties rising to $564,146, up 23.5% from 2016. Breckenridge/Blue River’s average price of all properties rose to $922,812, up 15.5%, from 2016.
When contemplating as large a financial commitment as the purchase or sale of a home, neighborhood micro-market data can make a significant impact on financial decisions. As Colorado continues to develop as a national leader in real estate, LIV Sotheby’s International Realty remains committed to helping consumers make better real estate decisions, whether purchasing or selling a home. Reports can be accessed at www.coloradomarketreports.com.
For more information, contact Brittanny Havard, director of communications, LIV Sotheby’s International Realty, at 303.486.3738. To list your home for sale with LIV Sotheby’s International Realty, please visit www.livsothebysrealty.com or call 303.893.3200.