Windermere Real Estate, the largest regional brokerage in the Western U.S. is celebrating its second year in the Denver market this month. After just two years, the Seattle-based company now ranks in the top 3% of all real estate brokerage companies in the metropolitan area.
While Windermere has been growing over the last two years, metro Denver homeowners have been benefitting from the robust growth in real estate prices. According to the latest report from the Federal Housing Finance Authority, Denver ranks 14th out of 258 metropolitan areas for home price appreciation with 10.14% growth over the last 12 months.
This appreciation rate is nearly double the long-term average of 5.8%. Prices in metro Denver have been appreciating at double-digit rates for the last four years in a row. The average price of a single-family home now stands at $448,000. Just two years ago, when Windermere started in Metro Denver, the average price was $371,000.
“For four years now we have had the perfect storm to cause prices to increase at a rate that is nearly double the long-term average. Metro Denver is one of the fastest growing populations in the country, we have an incredibly healthy economy with high employment, interest rates that are roughly half of the long-term average, and the inventory of homes is at all-time lows,” said Eric Thompson president of Windermere Real Estate in Colorado.
There are only 2,918 single family homes currently for sale in Metro Denver, 7.8% lower than a year ago. “With tight supply and strong demand, we see expect very strong price appreciation for the foreseeable future,” said Thompson.
About Windermere Colorado:
Since its inception in 1972, Windermere Real Estate has grown to be a network of 300 offices with more than 6,000 agents by focusing on three basic principles: hire the best people, give them the best tools and create thriving communities. Windermere’s growth has allowed them to expand into the Colorado market led by Eric Thompson, President of Windermere Colorado.
Centennial Office: www.Windermere5280.com
Cherry Creek office: www.wmdre.com
Annual employment growth in Colorado was measured at a respectable 2.2% in November and will likely finish the year having created around 55,000 new jobs. Within the metropolitan market areas included in this report, we are seeing employment growth at or above the state level and I anticipate that this will continue to be the case in 2017.
Unemployment rates continue to drop, and with rates now below three percent, all of Colorado’s metro areas are at full employment. Because of this robust level of growth—in concert with very low unemployment levels—I anticipate that we will see some fairly substantial income growth as companies look to recruit new talent and keep existing employees happy.
HOME SALE ACTIVITY
- There were 14,614 home sales during the fourth quarter of 2016—up by a marginal 0.7% from the same period in 2015.
- Jefferson County saw sales grow at the fastest rate over the past 12 months, with a 5.9% increase. Sales activity fell in three counties, but this was a function of short supply rather than slowing demand.
- Listing activity continues to remain well below historic averages, with the total number of homes for sale in the fourth quarter 12.8% below that seen a year ago.
- The key takeaway from this data is that 2017 is shaping up to be one which will still substantially favor home sellers. I do anticipate that we will see some improvement in listing activity, but it is almost a certainty that demand will exceed supply for another year.
- Demand continued to exceed supply in the final three months of 2016 and this caused home prices to continue to rise. In the fourth quarter, average prices rose by 9% when compared to the fourth quarter of 2015. The average sales price across the region is now $393,969.
- In many parts of the region, prices are well above historic highs and continue to trend upward. With double-digit price increases over the past year, the market remains very hot.
- Annual price growth was strongest in Larimer and Jefferson Counties, where prices rose by 11.8% and 10.9% respectively.
- While we will likely see some modest softening in home price growth in 2017, we can still expect a very strong market.
DAYS ON MARKET
- The average number of days it took to sell a home dropped by one day when compared to the fourth quarter of 2015.
- Homes in a majority of the counties took less than a month to sell.
- In the final quarter of the year, it took an average of just 27 days to sell a home. This is down from the 28 days it took in the fourth quarter of 2015.
- The Northern Colorado housing market is still firing on all cylinders. The only missing piece is listings, which remain well below the historic average.
This speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates, and larger economic factors.
For the fourth quarter of 2016, the needle remains firmly in the seller’s territory. It will be interesting to see if the recent increase in mortgage rates has any effect at all on the housing market. I believe that it will; however, I expect that it will likely cause a slowdown in home price growth rather than any collapse in home prices.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.