Until a few weeks ago, I could brag that I have not had a listing expire in over five years, but things are changing. For a good part of the summer, in monthly mastermind style discussions with a group of elite foothills agents, the conversation has consistently been about how “wonky,” in the description of one gentleman, this market seems to be. And yes, that is a real word, and we all agreed that was an apt description.
One of the biggest mistakes real estate agents make is to report market conditions based upon their current experience. It’s very common around the office coffee pot for two or three agents to report that their sales are up or their sales are down, or their clients are getting multiple offers and great prices for their properties—or just the opposite—they’re getting low offers or no offers. Each of us, individually, will have our ebbs and flows that are more relevant to our own current inventory of buyers and sellers than to the overall market. It is for that reason that I do a monthly deep dive into a multitude of market segments—79 of them to be exact. So, when you ask me, “How’s the market?”, you won’t get the common sales trainer BS answer: “Fantastic!” What you will get, as I wrote about a couple months ago, is “it depends,” followed with a real answer about your specific market conditions.
Although I can succinctly answer market questions regarding anything from Adams County condos to foothills luxury homes to downtown Denver lofts, my focus here will be our wonky foothills market. One initial reference I will make to the overall Denver metro market is that the last two years have seen just enough improvement in inventory, combined with “buyer fatigue” and a significant increase in apartment rentals available, that Denver as a whole has gone from a strong seller’s market to a more balanced market by definition. The foothills market is historically somewhat softer then the metro simply because living in these Denver bedroom communities is a luxury, as evidenced by the higher prices. The median price of a single-family home in Denver metro is $444,000 in contrast to
“ …sale prices are still increasing
at a healthy rate.”
$613,000 in the Jeffco foothills. Then, we drop almost $200,000 from median Evergreen to median Conifer-Pine, and another $120,000 to median Bailey. NOTE: Much (but not all) of this difference is relative to the size and features of “median homes” in the respective market areas.
For Evergreen, Conifer and all foothills market areas, first, I wish to dispel unfounded rumblings that our market is going into some kind of a correction in which you will see prices going down. I’m sorry to say for struggling entry-level buyers, that is wishful thinking. To dispel that notion, we first must be clear about what we’re meaning by “prices.” What I’m referencing is sale prices, not asking prices. Yes, asking prices have relaxed as most demonstrated by the number of price reductions being made. Evergreen has, for decades, been famous for pricing high and chipping down to an eventual price that attracts a contract. But sale prices are still increasing at a healthy rate. For instance, Evergreen’s average sale price increased over 4 percent in the last 12 months. Ironically, that’s better than the Denver metro as a whole, though lower than recent past years. And, as always, the devil is in the details. When you dissect this foothills market into its many subsets, we see all kinds of variances. For instance, Evergreen single-family home sales south of the lake average $121,000 less than single family homes north of the lake. That’s a big difference! Statistically, in another perspective, there is a five-month supply of single-family homes in the foothills, but only a three-month supply of townhomes and condos. Two years ago, it was just below a four-month supply of each. Probably the wonkiest snapshot is the $1,051,909 average asking price of homes actively for sale versus the $613,000 average sold price. Let that sink in.
The most important distinction to understand relative to market strength is the difference between the low end of the market, the middle of the market and the high end of the market. Normalization of the real estate market over the last two years has given buyers in the mid-range a fighting chance, but provided little or no relief at the low end, which is why we still see multiple offers in both of these market segments. That said, it did seem a little wonky when I had a four-party bidding war earlier this year on one of my luxury listings that caused it to go well over asking price. That one simply checked a lot of the boxes that luxury homeowners find most attractive, illuminating the fact that location and condition are significant.
I liken the changes currently occurring in the marketplace to a shift in the wind. There’s not a wholesale change in direction, just a small shift, like from due east to east-southeast, or something like that. I think the most important takeaway here is to not put too much stock into what you hear or witness on your street or in your neighborhood alone, or in conversation with friends (or strangers) as an accurate assessment of what’s going on with home values and market trends. Not to be cliché, but “knowledge is power” and to quote Will Rogers, “It isn’t what we don’t know that gives us trouble. It’s what we know that ain’t so!”
As always, the KC Butler “Home” Team wishes you all Happy Homes!
K.C. Butler, ABR, CRS, MRE, ePro, CDPE
K.C. has been a broker for over 30 years, and with RE/MAX from the start. He’s earned the RE/MAX Hall of Fame Award, the RE/MAX Lifetime Achievement Award and the “Above The Crowd” Distinguished Service Award for industry and community contributions. K.C. has been in the top 5 percent for sales production of all Realtors nationwide for most of his career. He is past president of the Jefferson County Association of Realtors, and past vice president of the Colorado Association of Realtors. Past Jefferson County Realtor of the Year is but one more testament of his commitment. K.C. and his family have resided in Evergreen since 1998.