Statistics are no substitute for a crystal ball, but Denver’s 2017 real estate market data provides some hints for what to expect in 2018.
According to Steve Blank, managing broker of LIV Sotheby’s International Realty’s downtown office, that data suggests that Denver’s market should stay healthy—yet remain a seller’s market—this year.
Blank’s firm studies home listings and sales data from the Multiple Listing Service REcolorado to create its annual Colorado Micro Market Report; the data represents about 90 percent of all local real estate transactions. And, Blank notes, those numbers paint a pretty clear picture for the coming year: “It’s steady growth; we’re not expecting the bottom to fall out,” he says. “Denver isn’t in a bubble.”
Denver housing prices have increased every year—between 9.5 and 11 percent—since 2012, according to Blank. “Last year, [prices] were up between 8 and 9 percent, which is still extremely good,” he says, “but I think it’s indicative of an inventory issue—and I don’t see that changing until the second half of 2018; I think we can expect a bit more inventory as the year wears on. But I don’t expect a high percentage of more properties sold, because the supply is still not there.”
In 2017, total new listings were down ever so slightly, falling .5 percent to 60,907 homes, according to the report. That was driven by an 8.2-percent decrease in condominium listings (driven by “a real shortage in condo development,” Blank says), as 6.2 percent more single-family homes were listed in 2017 than in the previous year. But values are still increasing, with the average sales price in the Denver metro area up 8.1 percent to $428,237.
The luxury market’s performance is especially telling, Blank says. The number of new listings of homes priced at $1 million or more was up 11 percent, total sales volume increased by 20 percent, yet values only increased by .4 percent. “That means the gap is closing,” he says.
But in some coveted neighborhoods, values continue to soar. The following hotspots saw average values increase by more than 15 percent in 2017: Bonnie Brae/Belcaro, Bow Mar South, Cherry Hills Village, City Park, Country Club, Crestmoor, Downtown, Hilltop, Observatory Park, Platte Park, and Washington Park West. But Blank cautions that because the number of sales within these neighborhoods is relatively small, the data shouldn’t be compared with the market on the whole.
“It’s a healthy market, we’ve got a good economy, and our unemployment is still below 3 percent,” he says in summary. “If anything, we have a problem with building—we are below where we need to be and inventory is still ridiculously low.” Does that mean the Denver crane count will increase in 2018? We’ll just have to wait and see.