Home sales and prices in metro Denver once again hit record highs in 2017, but the pace of price gains slowed as the market reached a higher altitude, according to the latest Denver Metro Real Estate Market Trends Report.
A record 57,788 single-family homes and condos sold across metro Denver last year, an increase of 2.93% form 2016, and ahead of the 2015 record of 56,062.
The average price of a single-family home sold last year reached $480,140, an increase of 8.7% from 2016. The median sold price, the point where half the homes sell for more and half for less, was $410,000, an increase of 7.9%.
Condo prices rose even more on a year-to-date basis, hitting an average sales price of $318,904 last year, up 10% from 2016, with a median sales price of $270,000, up 12.15% from 2016.
The uptick in the number of sales combined with higher prices pushed the total sales volume over $25 billion, up from $22.2 billion in 2016, $20.3 billion in 2015 and $17.6 billion in 2014.
In a sign of how far the market has come, the homes sales volume back in 2011 was around $9.9 billion, according to the report from the Denver Metro Association of Realtors. The report is based primarily on resales of existing homes but includes a small number of new homes.
Inventory shortages continue to drive price gains. As the year ended, there were only 3,854 homes on the market, a record low and slim pickings in a metro area of 3 million residents. Between 1985 and 2016, buyers had on average 13,702 homes available at the end of December.
"The lack of active listings should concern us all," said Steve Danyliw, chairman of the DMAR's Market Trends Committee, in comments included with the report. "Only time will tell if more sellers will choose to stay in their current homes, afraid that they won't be able to find a replacement."
One contributing factor to the low inventory is that many homes already have a buyer lined up before they hit the market, said Jim Smith, owner of Golden Real Estate in Golden.
Smith said 2,778 homes sold last year went under contract with zero days on the market, and another 1,880 sold after just one day on the market.
Smith said that in a large share of those zero-day sales, nearly 40%, the listing agent also represented the buyer. And in a sample he studied, the vast majority time sellers didn't offer to discount the commission to reflect that.
"Many listings are not being added to inventory so that all buyers have a shot at them," Smith said.
Danyliw predicted that double-digit price increases, which occurred in 2015 and 2016, are a thing of the past as higher prices push more potential buyers out of the market. But any kind of slowing would work in the favor of buyers.
