It is, perhaps, the most common question a Realtor is asked. "When is the best time to buy?" Realtors are always taught to say, "Of course now is the best time to buy." The truth is actually a little more complicated. The best time to buy depends on several factors, and there are several advantages and disadvantages associated with different times of the year. Let's break it down.
For most people, the two most important factors in deciding when to buy a home are the price and the number of available homes to view. Unfortunately, those conditions are generally not favorable at the same time.
We'll look first at the median sale prices for all homes sold in the Denver Metro Area in 2017.
You'll notice a couple different trends here. The lowest average sale price was seen in January 2017, at $399,00. From there we see the price increase each month with a peak in July, and then we see a slight taper downward, but we stay steady around the $425,000 through the end of the year. This is appreciation. In Denver, the market tends to appreciate at the highest rate during the early spring and summer months. This is the same trend year over year. For buyers that are able to purchase in the beginning of the year, they'll reap the benefits of that appreciation.
Based on this you might be thinking, "It's settled then! The best time to buy is in January!" There's a catch...
This shows the opposite side of the coin. The time you get the best price is going to be early in the year when you're in a strong appreciating market (like now), but that market can be insatiably tough. You can see the difference between active listings (homes available to purchase) vs solds (homes being gobbled up by buyers) gets wider during the later part of the summer; meaning that earlier in the year you'll see less homes hit the market and meet your needs and when they do pop up, be ready for a fight - where later in the summer you'll see the higher list prices because the appreciation has already happened, but there will be more homes available every week and less people (proportionally) fighting over them.
So, what does this mean? When is the best time to buy? Truth of the matter is, you're most likely buying a home you intend to keep for a long time and as part of your plan to build long term wealth so the best time to buy is whenever it fits your life, needs, and financial ability. In ten years, you'll be happy you did it and your net worth will be significantly higher than if you stay a renter. If you're wondering how buying a home can fit your life and financial ability, give us a call - we offer free consultations to help you understand what is required to buy and what actually goes into home ownership so you can decide if now is the right time for you.
Now here's a look at what's happening this month in your Real Estate market:
Denver Metro Real Estate, All Ten Counties
3506 properties sold this month - This is down 31.4% from last month, which is typical for January. For comparison, it is down just 5% from this time last year.
$405,000 median sale price for Single Family Homes this month - The record for single family homes was set last June at $411,000.
$285,000 median sale price for Townhomes/Condos this month - This represent a new all time record for Condos and Townhomes in the Denver Metro Area! The previous high was set last month at $283,000.
6,324 Active listings available this month - This is normal for this time of year, as we discussed above. Last year at this time, there were 7,329 homes available.
98% was the average sale price, relative to the original asking price this month - What this tells us is that homes, even during winter, are selling for almost full asking price. Last year this was slightly lower, at 97.4%.
Denver City Limits
757 properties sold this month - This is down 31.4% from last month, which is typical for January. For comparison, it is down just 7.5% from this time last year.
$425,000 median sale price for Single Family Homes this month - This is $20,000 more than the median price of the market as a whole. It's also just $11,603 below the all time record set in July 2017.
$370,000 median sale price for Townhomes/Condos this month - This represent a new all time record for Condos and Townhomes in Denver! It shatters the previous record set in October 2017 by almost $20,000. The median price for an attached home in Denver is $85,000 higher than the market as a whole.
1,027 Active listings available this month - This is normal for this time of year, as we discussed above. Last year at this time, there were 7,329 homes available.
97.8% was the average sale price, relative to the original asking price this month - What this tells us is that homes, even during winter, are selling for almost full asking price. Last year this was slightly lower, at 97.4%.
Luxury Market for The Metro Area (over $700,000)
332 properties sold this month - This is down almost 27% from last month, which is typical for January, especially in the luxury market. For comparison, 2018 saw 44% luxury homes sell in January than 2017.
82 day was the average Days on Market this month - It is typical to see the luxury market slow down a little this time of year. Last year, the average days on market was 101 in January, meaning homes this year sold almost 3 weeks sooner than they would have last year.
5.828 Months of Inventory - This number is the one the pros pay most attention to. This is a measure of how many months it would take for the current inventory of luxury homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there are 5 months of inventory. Over the course of last year, the luxury market started to see a shift towards a market that favors sellers slightly. There were 8.17 months of inventory this time last year. In fact, we've seen less than 6 months of inventory each month since March of 2017, which is a significant shift towards a sellers market.
$900,000 median sale price for Single Family Homes this month - We're up about $25,000 this month compared to last. We've seen this number stay between $880,000 and $900,000 for the past few years meaning, as a whole, the luxury market is not appreciating at a high rate.
1,925 active listings available this month - It's very similar to last month and just about 100 less listings than this time last year. Pretty typical.
95% was the average sale price, relative to the original listing price this month - What this tells us is that luxury buyers are expecting some room to negotiate. Seller's should price their homes accordingly. This is average for this time of year, but it shows a 2% increase compared to January 2017.
In all, the market looks pretty typical for this time of the year. There were a few little surprises this month, for instance, we set a new record for median sale price of condos/townhomes in Denver proper. We are still continuing to see a strong showing within the luxury division, with a strong shift having occurred last year towards a market that may slightly favor the seller.
Check back in a few weeks for February's Spotlight on a Local Business!