Defining Denver's Housing Market and the Importance of Median vs. Average Pricing
Fears of hyperinflation are beginning to subside as demand shows no sign of slowing
Any measure of statistics is a true measure of the perspectives leading data to the results.
Much like the hundreds of online polls, and official lists that rank Denver as one of the best places to live, we must assume that other cities have their own statistics that backup their own “Best” claims, and likely have their own variances in the market data as well.
In a widely publicized set of perspectives released earlier this month by the Denver Metro Association of REALTORS® (DMAR), the metro area appears to have just crossed the large average price threshold of $500,000. Reactions suggest that while many know our prices have been on the rise for some time, we have now entered uncharted territory. While DMAR and the Colorado Association of REALTORS® (CAR) compile their data from the same sources, there are two key differences; the calendar day in which the data is collected, and the counties included in the research. Both organizations include Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties but DMAR’s numbers, which suggested this new threshold, also include Clear Creek, Elbert, Gilpin and Park counties in their analysis. While the circulated number of $502,986 for a single-family home is absolutely valid considering DMAR’s snapshot, narrowing down my analysis with CAR numbers, the picture appears to be a little further away from this potentially financial and emotional barrier.
In February 2018 the seven-county metro region’s average sales price was $477,075 for a single-family dwelling. The median, or exact center of the data, shows a different picture – different than average as it doesn’t compile the volume of sales and divide it by the number of sales.
This month, the metro area saw a median sales price of only $419,950 – a nearly $83,000 variance from the viewpoint of our metro area’s average price. While Denver County’s median price is certainly higher at $455,500, with an average of $546,667, this average is showing us what can become a vastly different picture, easily swayed by the outliers, such as February’s most expensive sale in Denver at $3.2 million.
Whatever the source of data speaks to you or how it is compiled, the stories are correct, the Denver Metro Area is the place to be and the place to own your own home.
With 1.1 month worth of inventory currently available, less in Denver at 0.7, Denver’s stock is up – way up. Fears of hyperinflation are beginning to subside as demand shows absolutely no sign of reducing and a median price, which is up 11.6 percent in Denver over February of last year.