The first two months of 2017 saw an increase in home sales over the same period last year. The combined number of home sold in the January-February time frame is 4.42% higher than a year ago.
We are also seeing home price appreciation beginning to moderate. The 12-month moving average appreciation rate shows a 9.48% increase over the last year, lower than the 11.2% we saw at the end of February in 2016. Single family and multi-family prices this February compared to last February show mid-single digit increases of 6.92% and 4.42%.
A moderation in price increases would be a welcome trend. We had 10% plus annual appreciation in home prices in the 5-year period from 1996 to 2000. That was not a bubble and was not followed by a crash. Rather, the next five years saw average appreciation continue at a rate of 5% per year.
We’ve now seen another 5-year period of 10% plus annual appreciation in the 2012 to 2016 time frame. It would be healthy to see that rate decrease to mid-single digit levels like it did after the run up in the late 1990s. We have early indications that this may be occurring.
Some might attribute the moderating price increases and surge in home sales to interest rates that are edging up. People, it might be supposed, are rushing to beat the rate increases. More likely, the increasing number of homes sales is due to the fact that metro Denver has added between 40,000 and 50,000 new households over the last two years and those people need places to live.
Here is a summary of several market parameters for February 2017 compared to February of 2016:
The stats above are for sales activity in Adams, Arapahoe, Broomfield, Denver, Douglas, Elbert and Jefferson counties. It includes home sales handled by real estate agents though Metrolist/REColorado®, Inc., the MLS system serving the metro Denver area.
You can see a more extensive breakout between the single family and multi-family segments of the market by clicking on the links at the end of this post. Be sure to take a peek.
If you like the look of those reports, we can produce one for you that is specific to your zip code and property type. The market is not uniform. Your part of town may be doing better or worse than the metro-wide averages.