Home prices above $1 million selling in one-third the time and at double the pace of last year
Last year’s pandemic lockdown complicates any year-over-year comparisons when it comes to metro Denver’s housing market, but a few trends definitely remain in play, and some new ones are gaining strength.
There still aren’t enough properties available given demand, listings that do hit the market are going under contract in a flash, and prices continue to accelerate at a pace unimaginable a year ago, according to the Denver Metro Association of Realtors market trends report for April.
And in something rarely seen, luxury homes, defined as those topping $1 million, are a hot commodity, selling in one-third the time and at double the pace of recent years.
“Since last year, we have seen a steady rise in competition and therefore prices. With only two weeks of inventory, prices continue to be on the rise,” said Andrew Abrams, chairman of DMAR’s Market Trends Committee, in comments accompanying DMAR’s market trends report for April.
Two weeks in that there were only 2,594 homes and condos available for sale at the end of April, but 5,088 closings that month. The inventory of listings at the end of April is up 35% from March, five times the usual monthly percentage gain and a record for April.
Still, inventory levels remain down 62.2% from April 2020 and that is where comparisons get messy. Sellers, fearful of having strangers visiting their homes during a pandemic, yanked listings or held off on putting their homes up for sale back then. New listings that month were 43% below the number that showed up last month, Abrams noted.
The pandemic gave single-family homes a marketing edge over condos and that trend remains in play, although the condo market is heating up. Single-family listings spent an average of 10 days on the market last month, while condos spent 21 days. Average listing days for single-family homes are down 37.5% from March and half of year-ago levels. Condos saw a nearly 20% drop in listing times last month, but are only down 8.7% from April last year, when a big chill descended on the market.
Tight supply continues to push up prices. The median closing price of a home sold in metro Denver last month hit a record $585,000, up 4.3% from March and 23.2% from a year earlier. Condo prices also picked up the pace, with the median sales price of $376,360 a 7.3% increase from March and a 16.9% gain on the year.
One trend driving up home prices is that buyers are snapping up more luxury homes. In the first four months of 2018, 2019 and 2020, the number of $1 million-plus homes that sold in metro Denver ran from 649 to 661, a tight range. So far this year, buyers have closed on 1,353 of the high-end properties in metro Denver, according to the DMAR report.
Luxury homes are flying off the shelf, which rarely happens. The median days on the MLS for a luxury home was seven last month, down from 23 in 2020 and as much as 48 days in 2017.
But that raises one question, who is snapping up all those high-end homes, and begs another — does a market where the average sales price for a single-family home is now a tad under $700,000 need to redefine its definition of a luxury property?
Source: The Denver Post