While Denver experienced a hot summer, July home sales in the Denver area reflected more of a cooling trend.
July showed a bigger dip in home sales than the typical month-to-month seasonal slowdown. According to the latest report from the Denver Metro Association of Realtors the sale of single-family homes, condos, and townhomes dropped 19.66% from June and 8.29% from July 2016. On a month-to-month basis that’s almost twice the percentage drop from July 2016 from June 2015. However, last month’s year-over-year decrease was about half the decrease experienced from July 2016 from July 2015, so by that metric, sales were stronger than they may appear at first blush.
One reason sales may have dropped so much from June is because prospective buyers had little to choose from. There were only 7,352 active listings on the market last month, the lowest ever for a July, according to DMAR. In fact, it was the third consecutive July to have a record low for that month. The average sold price of a single-family home continues to hover at just under $500,000. The average sold price last month for a single-family home was $496,382 – basically flat from June, but up 8.43% on a year-over-year basis.
The brightest spot last month was for luxury homes. Homes priced at $1 million or more bucked the trend of falling sales on a year-over-year basis. Last month was the best July ever for luxury homes, according to an analysis of the market by Kentwood Real Estate. Some 130 luxury single-family homes traded hands in July, a 14 percent increase from the 114 in July 2016, according to Kentwood. The closed sales volume for luxury single-family homes jumped 15.3 percent to $198.934 million from $172.567 million, Kentwood reported. The most expensive homes on the market also sold 13 percent faster than last year, with the average days on the market dropping to 94 from 108.
On a year-to-date basis, luxury home sales have been even more impressive. In the first seven months of the year, the closed dollar volume topped $1 billion, the first time it has topped $1 billion that early, shows Kentwood’s analysis. The $1.3 billion in sales represented the closings of 808 luxury home sales in the first seven months of the year. That is a 28.7% jump in the number of sales and a 28.1% jump in the dollar volume from last year, according to Kentwood.
The decrease in sales activity is frustrating if your home hasn’t sold yet this summer. However, overall, the Denver housing market remains a strong seller’s market. July ended with only 1.61 month of inventory, or about seven weeks. That is a 2.4% drop in MOI from a year earlier.
A balanced market has a 5- to 7-month supply of unsold homes, so with a mere seven weeks, Denver is a long way from being a market where neither the buyer nor the seller has the upper hand.