Today I want to talk about the difference between an Attached vs Detached and Attached Single-Family Home Market. These are terms that are commonly used in zoning to determine the relationship between two buildings or the relationship between a building and a property line.
This is important because depending on which category you are different codes may apply in different ways.
So an attached building is a building that touches either two property lines or a is part of a group of buildings.
Detached doesn’t touch any property lines and does not touch another building.
A semi-detached touches one property line and one other building and Semi-Detached is always in a pair never in a group.
The Market for the Attached Single-Family
I’m going to talk about the February market recap for the attached single-family. There’s been a lot of conversation about a shift in our marketplace over the last few months.
It’s important that when we talk about the shift that we really isolate where it’s coming down to and I think but a lot of the shift that we’re experiencing happens to be in the attached market.
As a reminder, my report only talks about the seven metro Denver counties. I encourage you to review those reports as well but we’re not going to line up perfectly because we cover different geographies.
Attached Single Family Market
So when we’re talking about the attached market please keep in mind that about 18 to 24 months ago. There was a resolution to builder defect laws which made it very difficult for builders to develop attached dwellings, condos, townhomes, whatnot.
Now with that resolution to builder defect laws 18 to 24 months ago. Now we’ve had enough time for those builders to break ground and have completed projects that they’ve now brought forth to the market.
Now that we have those new units that we’re competing against in the resale market we’re starting to see some of the effects of what it means having more inventory available in that market.
Now the point of looking at the attached market separately is again. That’s where the bulk of the shift is that we’re looking at our market. Now when we talk about the shift.
My concern is I don’t want buyers to think that the market is changing from a seller’s market to a buyers market.
There are varying shades of shift that we look at in between and there’s it’s we would classify the attached single-family market. As a slightly less good seller’s market. I know it’s a super technical term.
But that’s a better explanation when trying to say that there’s a lot of shift that’s happening in that particular market.
Now active inventory is the biggest determining factor whether or not we’re experiencing a shift in our market for attached single-family. So active units came up again in February and we had 1704 active units for sale.
That represents a 38% increase from where we were one year ago and we’ve consistently been up by about a third for the last four or five months in a row.
So it looks like inventories around now to stay and inventories likely continue to gain as that first wave of new construction units is coming to market.
So basic fundamental economic principles if supply is going up and demand is staying relatively consistent which means that prices start to soften just a little bit.
When we say soften it means less of a sharp increase in our marketplace and price is actually held pretty constant as we were going into February.
So going from January to February they remained relatively flat technically they were down three-tenths of a percent down to three hundred and forty-four thousand dollars.
When we look at it year over year we were up by one point three percent to two hundred and ninety-two thousand for a median sales price.
Market Average days
Average days on market sat around thirty-four which is still historically a very quick sale considering at the peak of our market when we had distressed properties selling. The average days to contract was one hundred and twenty back in 2006.
Now when we’re looking at close to list price ratios those popped up nicely as we start to enter into a lighter compression phase for attached single-family. Where we came into 99.1 percent of their last asking price.
So we are seeing quickly that the opportunity for the negotiation period or buyers to have negotiating power at the bookends of the Year being January February and then again not until October, November, December.
That’s starting to decline and we do have a more competitive market going into spring.
Flash sales are the number of units that were under contract in seven days or less. Popped up to almost 40% of those attached dwellings were under contract in that first seven day period.
In 53 percent of condos that sold last month sold for at or over their asking price.