The Denver metro real estate market has stayed strong through the summer but the dynamics are changing. Prices are not going gangbusters any more but sales are still strong. Here are the highlights: # HOMES FOR SALE (INVENTORY) DOWN -20% FROM LAST YEAR (15,505 Homes For Sale Currently)
- WHAT’S TRENDING: This continues to be the biggest story for our Denver metro real estate market right now. Inventory continues to stay at record lows. Summer is the selling season and as expected we FINALLY saw # of homes for sale increase and peak in July. BUT the # is already back down 6% in August. Buyers are often feeling pinched with limited options and multiple offers even over list price are still common. Sellers are hoping to “make hay while the sun shines” but if they are also buying, are finding that to be quite a challenge. Seller rent-backs are becoming more common while other sellers are moving in with family until they find their next home.
- WHAT DOES THIS MEAN: There are about 9,000 homes selling every month and we only have 15,000 homes for sale. That means if new homes don’t come on the market, we would be “sold out” of homes in about 1.5 months. Whenever inventory is below 4-5 months it favors sellers. The longer inventory stays low the more it weighs in their favor. Buyers need to act quickly when they find a home they like and make an aggressive offer. Coming in way under list price expecting a counter is not a prudent strategy and is resulting in getting outbid by other buyers. Sellers need to have a strong pricing & marketing strategy to get the MAXIMUM price & buyer interest immediately when coming on the market. Even more importantly, your listing agent needs to help you work with the appraiser to try and get an appraisal that supports what a buyer is willing to pay. Appraisers are still going on historical data and have a tough time accounting for the premiums buyers are willing to pay in the low-inventory market.
- WHATS TRENDING: Median sold price is $265,000. It’s up about 3.5% from last August but down from June 2014.
- WHAT DOES THIS MEAN: People keep asking me “is this a bubble. My response: until inventory gains over take the # of homes sold, no. And once this does happen…due to population growth projections and rising rental rates, the values will hold as demand stays steady for home purchases. We eventually will see a slow down in price increases but I highly doubt we will see a decline. Many industry experts feel similarly. The challenge this presents is mostly for appraisals. They are based on “HISTORIC” data while buyers are making offers based on present demand and inventory levels. Some homes are not appraising for what buyers are willing to pay.
Despite inventory levels rising (as shown previously on this report) the time it takes to sell a home in the Denver Metro area is still only 2 weeks (14 days!) This has been about the same since April and will be the most telling sign that the market is shifting out of the sellers favor. BUT for now it’s still very much a seller’s market.# SOLD HOMES UP 61% FROM JANUARY
- This is THE BIG KAHUNA!!! So inventory (# of homes for sale) is just under 8k and was about 8k in January too….so we can accurately say inventory has stayed about the same. BUT……..the # of homes sold has more than doubled since January!! This means there are 7500 homes for sale and 6000 are selling/month…so we only have 1 month of inventory. That is CRAZY and is the biggest factor in the price gains we have seen already this year. My guesstimate is we will see BIG price jumps at end of summer when we look back because of this.
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