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Where is the current real estate market as we approach the final days of 2018? Denver was one of the leading cities in the country coming out of the 2012 recession. Metro Denver (seven counties) has enjoyed +/- 10% annual price appreciation for six straight years while recording some of the best statistics nationally. These noteworthy stats include: shortest length of time on the market prior to sale (24-30 days), one of the highest percentages of sold to list price (nearly 99%), and average annual sales price appreciation. We are moving from an incredibly hot real estate market to more of a warm “very good” market. This market provides buyers a chance to catch their breath as inventory of available homes for sale improve, offering a wider selection of homes more appropriate to personal preferences and budgets. This healthier market is allowing people to purchase because of timing in their lives, not timing based on the market. According to several economic forecasts for 2019, analysts anticipate from 3-6% appreciation (nationally) while Denver predictions range from 5-8% for 2019. Meanwhile, the Fed is looking to diminish inflation with mortgage rates hovering at +/- 5% (may rise over 5.25% in the next 3-6 months). A few other factors influencing the market, moving it from fast paced to more friendly are: significant cost(s) of new construction, record-high lumber prices, labor prices, and rising interest rates, along with a lack of available contractors. Experts have also recognized the various national disasters in Texas, Florida, and California may be affecting some of the residential needs across the country.

The housing market is beginning to look like “A Tale of Two Cities”. There is a widening divergence between larger urban (higher cost) areas, and smaller (more affordable) suburban or smaller community locations. For example: in Denver we are seeing more available homes come on the market with listed prices higher than a year ago, (values increasing but more slowly), while the smaller markets are seeing more steady increases.

The same kind of “Two City Tale” can be told about Metro-Denver, however the story is more related to price range than geography. It’s reported by LIV Sotheby’s International Realty’s most recent Micro Market Report that the number of sales Y-T-D are -2% less than this time in 2017, yet prices are 8% higher this year. These figures are based on all price ranges. Conversely, in the luxury price range the number of sales is 19% higher than last year, however prices are basically flat. In part, this is a result of a 12% higher number of available listings for sales (supply) combined with good buyer demand.

Another indicator that the market is cooling off a little, is that (nationally) “home flips” are at the lowest level in three years, according to Attom Data Solutions. The number of home flips in 2018 declined 12% from the third quarter of 2017 with “flip” investors finding success in smaller “less expensive” communities. An interesting exception to the trend is in the higher end of the luxury market, where new “specs” and high-end renovations are attaining good profit margins. The old adage of “the higher risk…the higher the profit”, still rings true.

If you’re shopping for a new home or wanting to be up on desired amenities being offered, check out these ideas:

  • Baby Boomers are seeing elevators as an appealing option, if not now, down the road or for aging relatives.
  • More homeowners have dogs (and less children) and consider their dog a family member, hence doggy showers are being built, often in laundry rooms fully tiled, three feet wide about two feet above ground, looking a little like a half tub.
  • Solar panels are not particularly pretty but add value and should save $60-$100 a month in utilities.
  • Doorbells now double as cameras and loudspeakers. See who’s at the door via a SmartApp while you are anywhere.

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