When looking at Denver Colorado real estate trends in anything, you want to take in the big picture, and then boil it down as necessary.
Real Estate in Denver is certainly showing a definite trend in the amount of inventory available. Month after month this year, we’ve experienced a depletion in homes for sale. In August, we’re at a low we haven’t seen since at least 2004, (my reporting doesn’t go back any further than 1/05.) There are only 3 months in these past 5 years where our inventory was less than today’s 20,225 and that was December 2008 with 19,600 available properties, Jan’09 with 19,748 and February ’09 20,059. I would call that a normal seasonal adjustment, as well as an adjustment to the immediate economic cliff we’d just fallen off.
Today’s low inventory is more than just a seasonal slow-down for the winter. It’s still 90 degrees here, and I had 45 people through an open house last weekend.
And look how many condos went under contract this past month! Up nearly 5% from July. That’s a reflection of most condos’ price-points being lower than single family, and condos are great starter homes for many people.
We have a number of contributing factors:
- Pent-up demand. Buyers are off the fence.
- Rates are still at historical lows.
- Great looking and well-priced houses are selling pretty quickly (average days-on-market is only 3 months.)
- Denver’s economy is beginning to pick up steam. The City and County of Denver has to balance a difficult budget, as does the state, but overall in-migration is on an upswing.
- Investors are swooping in and buying up property.
While our average price is down from this year’s high in June of $258,000, it’s the mix of properties that are selling which is skewing this number low. Homes priced from $100,000 to $300,000 are getting multiple bids, making it increasingly difficult for first-time home buyers to compete. Homes priced from $300,000 to $500,000 are taking a little longer, but are still in that sweet spot of a likely sale. Homes above $500,000 and especially over $1,000,000 are taking much longer and homes in the very high-end are competing against several years’ worth of inventory.
The take-away this month? If you’re thinking about buying a home soon, better get looking right away. Not only is the first-time home buyer tax credit set to expire at the end of November, but with fall and winter upon us soon, we’ll probably not see inventory (and your choice of houses) increase until after the first of the year.
Sellers? Your take-away is to continue to react to what the market is telling you. If you’ve been on the market more than 30 days and/or 30 showings then you need to adjust. What’s your feedback telling you? How do you compare with the houses currently on the market and most-importantly with the homes that sold while yours has been on the market? If you’re not willing to remodel the kitchen, replace the carpet or finish the basement then you need to adjust the price. If you’re in a compromised location like a busy street, you haven’t quantified that enough yet. And if you’re not getting any showings and no feedback, then you need to drastically reduce the price until feet begin walking through the door. If you aren’t willing or able to, then your house isn’t really on the market yet so consider taking it off (if you can) and waiting a little longer for better timing.