Denver-area buyers snapped up almost $13 billion in homes in 2012, almost a 30 percent jump from the dollar volume in 2011, according to a report released today.
Buyers paid $12.95 billion for 46,299 homes last year, a 28.6 percent increase in the dollar volume of $10.06 billion in 2011 and a 17.5 percent from the 39,387 closings in 2011, shows the report released by independent broker Gary Bauer, who based his report on Metrolist data.
There were 56,412 homes placed under contract last year, a 19.1 percent increase from the 47,373 in 2011.
The average price of a single-family home sold in all of 2012 broke the $300,000 barrier, averaging $304,178 for the entire year, an 8.7 percent increase from the year-to-date average of $279,858 in 2011. In December, the average price of a single-family home closed was $315,451, a 14.5 percent increase from the $275,610 average in December 2011 and a 2.8 percent increase from $306,773 in November. The median price of a home sold in December was $255,000, up 11.3 percent from $230,000 in December 2011.
Metrolist, separately, released its own report on December tallies on Monday.
Metrolist reports showed there were only 7,706 unsold homes on the market, a 29.9 percent drop from the 10,993 available homes for sale in December 2011.
Last month’s inventory number was the lowest since December 1993, when there were 7,711 homes on the market. To put that into perspective, the population of the Denver area grew 52.5 percent from 1990 to 2010, according to the U.S. Census Bureau. percent.
Some of these numbers are absolutely staggering — the dollar volume rising 28.6 percent, the 19 percent increase in contracts and the 17.5 percent increase in closings.
Why these numbers are so strong, in a big part, is because the inventory numbers are so low. That is putting pressures on buyers and creating opportunities for sellers.
Single-family detached homes accounted for almost 83 percent of the inventory in December, with condos accounting for about 17 percent. The single-family inventory is down almost 73 percent from its peak in January 2006, while the condo inventory has dropped almost 85 percent from its peak.
With supply and demand so out of whack, one might expect prices to being rising more than they have.
What I find most significant is that prices have not exploded. I think that is going to be a key to a successful 2013 and 2014. Prices are starting to rise here, but at a reasonable and sustainable pace. That is not true in other markets. In Arizona and parts of Florida, prices already are showing double-digit gains. I just can’t help thinking: here we go again with another boom-bust cycle starting.
Colorado buyers are more conservative by their nature and are unwilling to participate in these explosive price increases,. Even in cases where there are multiple offers for a home, a buyer in the Denver area isn’t willing to bid $50,000 more on a $240,000 house. That is happening in other markets. In Denver, a buyer might offer $5,000 more and if he is out-bid will wait for another opportunity.
Also, while the Denver-area luxury market is improving, prices at the high-end have not risen enough to dramatically lift the average price for the overall market. Luxury homes aren’t pulling up the rest of the market.
All over the country, home sales in the winter months proved to be a bright spot in the headlines. Buyers in the Denver area are signing on the dotted line quickly, so their dream homes don’t slip through their fingers.
We’re seeing a lot of competition for homes that are available. With an average of 73 days on the market for December home sales, I anticipate the market to remain brisk in 2013.
A year earlier, it took 107 days to sell a home, a 32 percent increase.
Sales activity in 2013 looks good, year-over-year price increases will remain flat. However, mortgage rates are expected to continue to hover near their historical low rates, which will keep consumers interested in buying a home.
There is much more confidence in the market. That it is really nice to see, after all of these years.