Happy New Year! Merry Christmas and Happy New Year! Are you like us, wondering what happened?! We just got thru July 4th then the start of school for the
New Year With New Stats From The RE Market Nationwide And For Denver Metro
Happy New Year!
Merry Christmas and Happy New Year!
Are you like us, wondering what happened?! We just got thru July 4th then the start of school for the kids, then Halloween then to Thanksgiving and a few days later, it seemed, Christmas was here! Well, yes, all of that did happen and now here we sit getting ready for 2019 in just a few days.
We hope you have at least a few New Year’s Resolutions like:
• Travel more
What are your New Year’s Resolutions?
The Norris4Homes Team wants to be your go-to resource for selling or buying your next home in 2019. Please reach out to us or refer us to your friends and family and we will be honored to work with them and give them excellent service.
We hope you enjoy this month's newsletter. It is full of insights and predictions for the real estate market for 2019.
Cheers, John and Steven Norris
Home prices are up nationwide
Denver Metro Trends- Dec 2018
Denver Metro Trends Report
In November, year to date, housing inventory has increased 46.76 percent compared to last year in the residential market (single-family and condos). Meanwhile, fewer homes sold in the Denver area in November, down 17.27 percent from October, and that dropped the number of sales year to date to less than any in the past three years.
Meanwhile, “when we looked a little closer, we saw the average sold price was up 8.68 percent year to date compared to 2017,” Jill Schafer, Chair of the DMAR Market Trends Committee and Metro Denver REALTOR®.
Looking deeper into the numbers, for the entire residential market, November ended with 7,530 active homes on the market, down 11.82 percent from the prior month and up 46.76 percent year over year. At month’s end, there were 3,964 homes under contract, down 10.6 percent from the prior month and 3.03 percent year over year. The number of homes sold dropped to 3,732, down 23.6 percent year over year. Sales volume also dropped by 18.6 percent month over month and year over year to $1.73 billion.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and – new to the report - “Classic Market” (properties sold between $400,000 and $499,999). In November, 121 homes sold and closed for $1 million or greater – down 20.39 percent year over year. The closed dollar volume in November in the luxury segment was approximately $199.5 million, down 13 percent year over year.
The highest priced single-family home sold in November was $4,855,535 representing six bedrooms, nine bathrooms and 7,785 above ground square feet in Cherry Hills Village. The highest priced condo sold was $4.5 million representing three bedrooms, three bathrooms and 4,903 above ground square feet in Denver.
“The luxury single-family home segment is sitting at 7.22 months of inventory, whereas the luxury condo market is sitting at 6.67 months. This is an important indicator as this shows that the Luxury Market is officially a buyer’s market,” states Libby Levinson, DMAR Market Trends Committee member and metro Denver REALTOR®. “With interest rates on the rise, this may be the best time for buyers in the Luxury Market with low rates and the ability to negotiate.”
Notably, year to date, the single-family Luxury Market experienced 1,851 homes sold versus 1,521 in 2017. Conversely, the luxury condo market experienced 170 units sold in 2017 with slightly less units sold in 2018 with 167. Days on market for single-family homes have held strong at 73 days for November and October, as well as November of 2017. “So, as things appear to be shifting towards buyers, it’s time to get back-to-basics,” adds Levinson.
Further Proof It's Not 2008 All Over Again
Home sales numbers are leveling off, the rate of price appreciation has slowed to more historically normal averages, and inventory is finally increasing. We are headed into a more normal housing market.
However, some are seeing these adjustments as red flags and are suggesting that we are headed back to the same challenges we experienced in 2008. Today, let’s look at one set of statistics that prove the current market is nothing like the one that preceded the housing crash last decade.
The previous bubble was mostly caused by unhealthy levels of mortgage debt. New purchasers were putting down the minimum down payment, resulting in them having little if any equity in their homes.
Existing homeowners were using their homes as ATMs by refinancing and swapping their equity for cash. When prices started to fall, many homeowners found themselves in a negative equity situation (where their mortgage was higher than the value of their home) so they walked away which caused prices to fall even further. When this happened, even more homeowners found themselves in negative equity situations which caused them to walk away as well, and so a vicious cycle formed.
Today, the equity situation is totally different. According to a new report from ATTOM Data Solutions more than 1-in-4 homes with a mortgage have at least 50% equity. The report explains:
“…nearly 14.5 million U.S. properties were equity rich — where the combined estimated amount of loans secured by the property was 50 percent or less of the property’s estimated market value…The 14.5 million equity rich properties in Q3 2018 represented 25.7 percent of all properties with a mortgage.”
In addition, according to the U.S. Census Bureau, 30.3% of homes in the country have no mortgage on them.
Almost 50% of all homes have at least 50% equity.
If we take both numbers, the 30.3% of all homes without a mortgage and the 17.9% with at least 50% equity (25.7% of the 69.3% of homes with a mortgage), we realize that 48.2% of all homes in the country have at least 50% equity.
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