There is good news if you are a prospective home buyer in the Denver area. Last month, the market experienced a near 25% increase in the number of homes on the market from April, with an active inventory of 6,437 single-family homes, townhomes and condominiums. While inventory normally rise on a month-to-month basis this time of the year, as the historic strong summer selling season kicks off, this May saw an especially big percentage increase. In May 2017, for example, the market experienced a 9.96% increased from April. Therefore, the percentage increase this May was about 2.5 times greater than a year ago. Year-over-year statistics showed a 9.19% increase in active listings this May, compared to a 7.91% increase in May 2017 from May 2016. Some 7,748 homes hit the market last month. And the number of new listings on the market rose by 12% from April.
Meanwhile, home prices rose only slightly month-over-month in May, but continued a double-digit march upward on a year-over-year basis. The average price of all homes sold in the metro area is approaching $500,000, a milestone already reached for single-family homes. The average price of all homes sold last month was $490,355, less than a 1% increase from April. However, it was a different story for all homes on a year-over-year basis, with prices rising by 11.37%. The average price of a single-family home, meanwhile, was $540,624, largely unchanged from April, but up 10.67% from May 2017. The sales activity also picked up on a month-to-month basis.
The 5,235 sales of all homes marked almost a 6% increase from May and the 6,178 homes placed under contract was about a 5.5% increase from the previous month. The increase in listings was reflected in the months of inventory. There was only a 1.28-month supply of single-family homes on the market in March. As incredibly low as that is, the months-of-inventory for single-family homes was up 8.5% from May 2017.
The good news for first-time home buyers is that on a percentage basis, the months of inventory almost doubled at some price points. But don’t let the large percentage increases fool you, because the numbers are small. For example, there was 1.92-months-of-inventory for homes priced from $100,000 to $199,999 last month, a 97.9% increase from May 2017. Still, there were a mere 23 listings available in that price range last month, so it is easy to imagine price wars for the two dozen homes listed below $200,000. But what is encouraging is that the luxury home market continues to be the strongest in the Denver area on a percentage basis. At the end of May, there was a 4.16-month supply of unsold homes in that price range. That is a 28.6% drop in luxury inventory levels from a year earlier. The luxury market is the only price point that is in equilibrium between buyers and sellers in the Denver area. Despite the increase in inventory levels, the overall housing market in the Denver area remains a strong seller’s market.
A separate report by Kentwood Real Estate showed that 178 single-family luxury homes priced at least $1 million sold last month in the Denver area. That is a 19.5% jump from May 2017. That makes last month the best luxury home market for any May on record. Total dollar volume for luxury, single-family homes soared by 18% to $265 million on a year-over-year basis. Not only were there more luxury home sales, but they sold much faster. The average days on the market for a luxury home was 68 days, a whopping 34% drop from the 103 days it took to sell a luxury single-family home in May 2017, Kentwood reported.