Mixed signals for 2016 for the Washington Park Denver real estate market. Home owners have enjoyed an unbroken three years of a market that has been ‘full-speed-ahead’ in every way. Prices have jumped considerably—25% since 2012, which is pretty amazing by any standard.
The signals however began to change some in 2015: The price of bungalows plateaued and even dropped off at the highest level. Demand showed signs of abating a bit and it became increasingly clear that buyers were not going to bite at any price as we saw price-drops becoming more frequent especially in overprice listings. So here’s the good news and maybe some tempered new for 2016.
Good news for sellers. Denver and Colorado is still adding population at a strong clip (yeah that could also be bad news…I said “for sellers”)—over 100,000 last year and projected about the same this. Most of that growth is locating along the Front Range. Housing supply is not keeping up with demand—The Front Range added 45,000 households but only 25,000 housing units in 2015. We Denverites are gainfully employed with an unemployment rate of 3.6% (real low). All that adds up to the old economic principle of strong demand due to limited supply, so good news!
Tempered news for sellers. The market has pushed values into a range where there are simply less who can afford to live here—at least till wage inflation catches up. Our average home price sits above a half-million dollars now. Interest rates have ticked up–not a lot but a little which also constricts the buyer who can afford these prices. There was a post recession surge of buyers. That surge has now run its course and has leveled out. Those facts will have a limiting effect on the number of buyers and demand for homes.
Conclusions? As a rule I still expect to see buyer demand exceeding supply but just not like the last few years. In a sense we are returning to a more balanced, normal market. So here’s what you need to know and can expect for 2016:
- Prices will rise but just not as much as the double digits we’ve grown accustom to. Look for a modest 4-5% price growth this year.
- We’ll still see some bidding wars but not as many and to lesser extremes.
- The numbers of days on market to sell a home will lengthen some. Last year it was 28. Expect that to move to the 40-45 day range.
- More competition so marketing your home correctly and expertise in pricing will become even more important.
In short 2016 looks to still be a solid year for the Washington Park market, just not quite hitting the highs of the recent past. If your plans for 2016 are to sell then give us a call. We are the local experts and we’ll help you get it done netting you the most for your home while minimizing the stress and hassle.
See you around the neighborhood
Tom & Denise Snyder