2015 Year End Market Review
2015 was a tremendous year in Denver real estate. The residential market sales volume totaled $20.16 billion, up 14.5% from 2014. Also up—the average home price, the population in the metro area, tourism, density in the downtown core… the list goes on. Denver is growing like never before, and we’re at the heart of the change day-to-day, immersed in assisting buyers and sellers moving properties around the city.
Historically low inventory across Denver kept us on our toes throughout
2015, with buyers competing in multiple-offer situations more often than not. In May, metro Denver’s housing supply was five times less than the national average, with winning offers almost always including creative terms and various contingencies waived. While the landscape was and remains extremely competitive for buyers, January 2015 recorded the highest consumer confidence since August 2007. Despite favorable circumstances for sellers, buyers lined up to purchase, motivated by low interest rates and the confidence that Denver will continue to thrive for years to come—and, to escape increasing rental rates.
April 2015 brought Realtor.com’s announcement that Denver was namedthe Nation’s Hottest Real Estate Market in the U.S. With substantial economic growth, low unemployment, high appreciation and the fastest-moving inventory in the country, Denver was the only non-California city in the upper rankings. San Francisco and San Jose grabbed spots #2 and #3, with Vallejo, Santa Cruz and Santa Rosa all in the top 10. “The Colorado story is more of a continuing saga that shows the resilience and diversified nature of the state’s economies despite the declines in oil,” wrote Cicely Wedgeworth in a June 2015 realtor.com article on the hottest U.S. markets.
In August, rental rates skyrocketed at three times the national average, adding to an affordable housing shortage that has become impossible to ignore and arguably threatens the city’s identity. Mayor Michael Hancock has created a five-year plan for the city, and addressing the affordable housing dilemma is a major part of his initiative. Hancock and his team are working to raise $15M+ a year to fund projects that include income-qualified units, among other efforts. “The vibrancy of this city is to be able to have a diversity of residents,” Hancock says. “I have the audacity to believe that if you want to live in Denver you should be able to find a decent, affordable place to live.” In the meantime, many longtime residents are facing displacement and/or increased taxes. And the growth continues relentlessly, as Denver’s tech scene thrives and the number of entrepreneurial startups climbs. “As businesses relocate here and try to retain employees, it’s a key issue in terms of whether employees can live here, what kind of commute there is, the impact on their families,” said former Boulder Mayor Leslie Durgin. “It’s all tied together. You can’t isolate one from another.”
Available inventory of homes for sale in the metro area increased nominally from July to August, but even the slightest shift was noticeable. From August forward the 2015 market showed small signs of leveling off at bit, with October total sales volume down 14% from September, and November total sales volume down 29% from October. While encouraging to buyers, it’s relevant to note that these months were still remarkable compared to years past. September 2015 was the best September on record for the residential market since 2010, and in October 2015 eighty-seven homes over $1M closed, with the luxury condo segment of the market up 17.57% year over year.
2015 ended on a level plane, with momentum slowing but confidence and optimism high. The year closed with 4,384 active listings, just shy of December’s record low-point in 2014, with 4,355 listings. Worth noting, data from 1985 to the present day shows that the Denver-area has averaged 13,869 active listings in December. With 24,603 listings at the close of December 2007, our market goes to show that a lot can change in a short time. For those considering buying, selling, investing… go for it. It’s an exciting and record-shattering time to be a part of Denver’s story.