Denver: fewer homes selling faster. Decline continues in homes for sale and time on market. If you are looking to purchase a home in Denver, your choices and your window of opportunity are shrinking. If you’re looking to sell, the market may be in your favor. According to a March 17 report on national housing published by RE/MAX, an international real estate company headquartered in Denver, Denver ranked in the top three for lowest number of homes for sale and days those homes were on market in February 2017. Nationally, the number of homes for sale in February was down 2.2% from January 2017 and a sizable 17.9% down from February of last year. According to RE/Max, a 6.0-month supply indicates a market that is equally balanced between buyers and sellers. A supply above 6.0 can be considered a buyer’s market. In February, Denver had a 1.0 supply, tying with Seattle, WA for the lowest supply of inventory. San Francisco, CA edged into second place at 1.1. Homes for sale in Denver were on the market for an average of just 38 days in February. Homes in San Francisco and Omaha, NE were snatched up just slightly faster at 32 and 34 days, respectively. Nationally, homes for sale spent an average of 68 days on the market, up from January 2017’s 66 days, but a full week shorter than the February 2016 average. For RE/MAX’s reporting, Days on Market is calculated as the number of days between when a home was first listed and when a sales contract was signed.
How much do I need to earn to afford an average house in the Denver metro?
That’s a question a report out this month from HSH.com® aims to tackle along with the salaries required to afford median-priced homes in 26 other U.S. metro areas.
The report calculates that to afford everything that makes up a mortgage payment (home loan principal, interest, taxes, and insurance payments) for a median-priced Denver metro area home a homebuyer needs to earn a salary of $72,772. The median price for a home in the Denver metro area was $381,600 in the fourth quarter of 2016.
The salary needed to purchase a median Denver metro home increased $2,031 from the third quarter of 2016. That is slightly more than the national average increase in salary needed of $1,583 over that same time period.
The salary calculation is based on a 3.97 percent 30-year fixed mortgage rate and monthly payments of $1,698 and assumes a 20 percent down payment. If a homebuyer were to put down only 10 percent, the required salary would increase to $85,948.
Denver is ranked 20th out of the 27 metro areas for salary needed to afford a median-priced home, between #19 Portland at $70,895 and #21 Washington DC at $80,230. Pittsburgh required the lowest salary at $32,374 for a $130,000 home. The highest salary required was $160,590 for a median home price of $837,500 in San Francisco.
The national median home price is $235,000 with monthly payments of $1,212, requiring a salary of $51,963. The salary needed to purchase median homes rose in all but five of the 27 markets.