Real estate brokers are often asked, “How long will my house be on the market?”
We can only speak in averages, utilizing some of our experience to weigh and balance your home’s appeal, decor, location and other salient factors.  One key factor is assessing how much inventory we have on the market.  And where the new listing falls among the competition for price and condition.
Sellers should pay attention to the length of time their house will take to sell for a few reasons:

• One is to brace yourself for the daily grind of preparing a house to show at any moment.
• Another is to reflect on timing issues.  Do you need to be moved by the start of school?  Do you want to take advantage of the prime selling season?  Are you being relocated in three weeks?
• The most important reason to pay attention to average selling time?  Pricing!

In Denver, the MLS posts average Days on Market.  Higher inventory generally means longer DoM.  When inventory is lower, DoM shrinks too.  In May 2010, we had 21,433 homes/condos on the market.  Average DoM was 76.  In June 2010, we had 22,689 homes/condos on the market and the average DoM went up to 82.
Average DoM is looking back. Looking forward, how long could it take to sell? Take existing inventory and divide by sales that month.  In June, Denver had 5.4 months supply of single family homes on the market.
Here’s a simple chart to explain the conventional real estate wisdom around inventory and time on market.  When houses take 7 months or more to sell, it’s a depreciating market.  When it takes less than 4 months, prices will be appreciating.  This is basic real estate supply and demand.
 

Denver’s available single family as compared with closed is pushing us above 5 months of inventory.  DoM will likely continue to lengthen in coming months.  More homes coming on, fewer selling.  Eventually, this could erode the price stabilization we’ve had.
However!  Buyers could react to low rates and low prices, realizing that their dream of a new home has more to do with lifestyle than with timing the markets.  If banks don’t push out too much new inventory, prices will keep stabilizing.
It’s the shadow inventory that threatens us.  Without that, Denver is poised to bump along for awhile and then turn the corner. There are buyers who recognize this is a great time to buy.  They will get the good deals at great rates.  Sellers must be keenly aware of the fine balance we’re facing – balancing how new inventory could affect their saleability.
Watch the monthly market statistics here.  Do the math and calculate how many months inventory we have and determine the best way to move your home to the front of the line – the home that buyers will pick next.