Yes, you read that right! The number of homes for sale in the Denver metro MLS is down 36% from last December. It is down 10% from last month. Currently there are only 12,634 homes for sale. When the market first dipped in 2006/2007 it was common to see 30k homes for sale.
Another key stat – Sold homes are UP 15% from this time last year
What does this mean?
For Sellers: Less competition and more homes are selling…so the market is becoming more favorable for sellers than it has been.
For Buyers: Fewer choices. Buyers now have to decide what is a bigger priority in a home and be more willing to compromise on their criteria to get a bigger selection i.e. price, location, etc. For buyers with specific criteria they may be disappointed with the limited options available.
In Summary: The Denver real estate market prices are holding steady over the past 12 months. Inventory is down BIG, and sold homes are up 15%. These are all good indicators that the market is improving. When demand increases and supply decreases, basic economics tells us that prices will go up. If this trend continues in 2012 then this price recovery is what I would expect.
What to watch for:
- Shadow inventory – some industry experts claim that banks are holding onto their foreclosed homes vs putting them on the market…but may flood the market this spring. Will this happen? It’s all speculation.If it does then inventory will rise, prices will go down slightly, and the recovery will take longer. If this doesn’t happen, the indicators above could pull us through a recovery faster than we expect.
- Loosened Lending Guidelines – The guidelines seem to be getting looser for getting a mortgage and at the very least, there are more options for buyers other than the 20% down conventional loan. So….if this trend continues…there will be more buyers…which increases demand…and wala…continued market improvement.