We’ve rolled into a new year. Let’s take a quick look at how metro Denver real estate fared in 2014 and what the landscape is looking like for 2015.
Review of 2014
The inventory of homes on the market was at historically low levels in 2014. Right? That was the big story all year. When you hear that, however, it makes you think that fewer people were selling. That was not the case.
Reality: The number of homes sold by agents through the MLS system was almost unchanged from 2014 versus 2013. Properties closed in 2014 stood at 55,862, a mere 155 short of the 56,017 homes sold in 2013. Overall, the supply of homes held steady.
The low inventory was not a result of fewer sellers; rather, it was due to a massive increase in buyers. Supply was steady but demand was up. This kept the number of homes available at any one time at a fairly low level as buyers snatched them up as soon as they hit the market.
With demand up and no increase in supply, homes prices rose briskly. Single-family homes showed a healthy 8.59% increase in value while multi-family properties like condos and townhomes were up by double digits at 14.14%.
It is easier to be an historian than it is to be a prophet. I can tell you exactly what happened in 2014. No one can know the future with certainty although everyone seems to have an opinion.
Want proof? Open your favorite web browser and goggle “the coming real estate boom”. Then goggle “the coming real estate crash”. You’ll get several million hits for both.
There are bulls and bears in real estate just like in the stock market – people that believe we are about to achieve Nirvana or trigger Armageddon.
That said, I can make some educated guesses about how 2015 will unfold. I won’t bore you with esoteric details about household formation and job creation and GDP projections. Just know that economists for big banks and industry trade groups like the National Association of Realtors, that spend all day tracking housing trends very closely, have similar projections. Those specialized economists believe 2015 will look a lot like 2014 with a couple of welcome changes: (1) More sellers may enter the market and ease inventory concerns to some extent and (2) Home prices will continue to rise but at a more modest rate that has more long term sustainability.
You and Real Estate in 2015
Will you or someone you know need to buy or sell in 2015? When it comes right down to it, real estate is very personal. Needs arise independently of what the market is doing or is likely to do. There is always a way to make the move you need or want to make. I’d love to sit down with you or anyone you know and figure out a game plan for the moves you need to make this year. I can make it happen in a productive and profitable way.