Everyone wants to know what to expect from the real estate market in 2019. Unfortunately there was no crystal ball in my stocking so I can't see into the future, but I can tell you what happened to the market in December, how it compared to other Decembers and what was worth celebrating in 2018.
Was it really the most wonderful time of the year? The number of attached and detached homes new to the market in December dropped like the ball in Times Square, down 41.18 percent from November. With fewer new listings coming on the market, we saw the overall number of active listings shrink a record breaking 25.94 percent, month over month. The number of sales was also down 17.79 percent, from November. Meanwhile, sellers had to keep their homes neat and tidy for longer with the average days on the market up 21.88 percent from 32 to 39.
Some of these changes are to be expected at this time of year as buyers often find themselves busy with family and parties in December and put off house shopping. Since 2008, there has been a consistent drop in active listings from November to December, but, interestingly, we've seen the number of homes sold go up in the last month of six of those years and down in five.
2018 Wrap-Up. Sellers celebrated in the first half of the year with a crazy blur of multiple offers and fast sales. lt was buyers' turn to celebrate when the inventory jumped up in May and June, causing a market adjustment in the second half of the year and finally giving them some choices. We ended 2018 with 5.52 percent fewer sales and 44.71 percent more active listings for buyers to choose from than 2017. With more competition, many sellers had to make price reductions for the first time in years.
With sales down and inventory up, it might not make a lot of sense for prices to be up, but they continued to rise. The average price for a detached single-family home in 2018 was $522,839, up 8.05 percent in a year. The average price of a condo increased 9.82 percent, ending the year at $351,677. Why are prices continuing to go up? People keep moving to the Denver area. According to the US Census Bureau, 80,000 people moved to our fine state from mid-2017 to mid-2018. Also, young millennials are pouring into the real estate scene as first-time home buyers adding to the demand.
The National Association of REALTORS(R) polished its crystal ball and predicted the Denver metro area market will stabilize in 2019 with the number of homes sold dropping 6.7 percent and prices going up 6.8 percent. With that in mind, buyers are going to want to jump in and take advantage of the increase in choices before prices and interest rates go up. Those in the know are predicting two interest rate increases in 2019.
Despite what feels like a major shift, sellers are still in control in all price ranges except for homes priced over $1 million where buyers and sellers are on equal footing. There's no time like the present to buy or sell a home in the Denver metro area.
DMAR Market Trends, December 2018