The Denver real estate market is like the old saw about a riddle wrapped in a conundrum wrapped in an enigma. I wish my crystal ball was working better, but I’ll have to rely on instinct, experience and my best guess.
Here are some statistics taken from the Denver MLS for May 2008:
The upshot is that we have 9 1/2 % fewer properties on the market than we did a year ago, and just .62 % more than the month before. The dreaded “over-supply” of inventory seems to be diminishing during the season one would expect to see more properties coming on the market, not less.
Days on Market
The number of days homes are on the market is shortening as well. The average number of days a house is on the market right now is about 100. This equates to a 3 month supply – what analysts consider a balanced market.
In the late 1980’s our market really took a tumble, mainly because the oil shale business dried up. As we look back on that time now, one of the leading indicators that the market was beginning to turn the corner was when number of days on the market shortened. First – fewer days on the market, next – less inventory, finally – prices stabilized.
One of the statistics you won’t see in the chart is that many homes are getting multiple offers. In fact, last night I received two offers on one of my listings. Check out LifeStyle Listings and see if you can guess which one, but I can’t tell you yet. One agent wrote a decent offer that still needs to be tweaked a bit, but we can work with it. Another agent brought an offer in excess of $100,000 off of the offering price. She said her clients wouldn’t reconsider their offer because they’d read in the papers that it’s a buyer’s market. I wonder how many offers that agent will be writing up for them…
Yes, the average price is still down from last year. We’re pulling out of the slump, but we’re not out of it yet. It’s just a turning of the corner right now. We’ve also experienced a lower price point of homes getting offers than we did in 2007. In our office, the price point of homes that are selling quickly has recently been between $300,000 and $800,000. Last year our higher priced listings were selling much better. This fact alone could be what’s driving down the average sale price, rather than an actual decline of prices.
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