This week we are continuing our series "Big Questions in Real Estate" featuring important questions about real estate provided by you! This month's big question we are answering is: "Where have all the houses gone?"
Inventory Goes Dormant in Winter
The news of low inventory is a broken record at this point, and we don't want to give you the impression that all hope is lost. In fact, we have some really great news to share this week that may positively impact your buying or selling experience this year. Like the cycle of plants, inventory tends to go dormant in the winter and starts to pop up in the spring... and spring is here!
Spring Market Re-Engages Buyers + Sellers
When we take a look at the market dynamics for Denver, one thing is clear: like a heartbeat, there is a rhythm and cadence to our market that we typically see every calendar year. The rise and fall of inventory is a natural experience we have in our market and we are currently on the rise. From last month to this month, we have a 29.3% increase in inventory this month and our supply of inventory rose to 0.6 months which means if no new inventory came on the market we would sell out of homes in about 16-17 days. If that doesn't sound like much you are probably right - it's not what we have seen in past decades but the good news is we are up 2.7% of the inventory available from last year! And another great thing to note is active inventory is up nearly 30% while pending transactions are only up 11.9% signaling to us that at this rate, more homes are going to market than are going under contract.
Bottom Line: Active inventory is typically at its highest in the late summer and the lowest inventory in the cold winter months. We are in the rising phase of our inventory count. As a seller, getting your home to market in the first and second quarters of the year yields the most buyer activity. As a buyer, starting your search now will provide you with the best chance of seeing inventory as it begins to rise in our market.
Buyers Have Been Active Earlier this Year
If you spoke to any of us within the last six weeks, you would have found us raising our hands wondering how this market is going to keep up with demand. And when you see the number of showings you can see why we had concerns. How can we have enough homes for the number of buyers out there? Just this year alone there have been 89,694 showings scheduled, a 42% rise from last year. What we can deduce from this is buyers are starting to look earlier in the year knowing it may take longer to secure their new home. And sellers are responding to this by putting their home on the market earlier in the year - though sellers are about 4-6 weeks behind demand. The showable properties at this time are about 4,077 total properties and if sellers are 4-6 weeks behind that puts us in the April/May months to start seeing even more inventory pop up!
Bottom Line: If it takes 30,000 homes to be in a balanced market, then 4,000 homes doesn't feel like a big dent in inventory overall. However, compared to last year, there is a 53.6% rise in showable homes so we know that in the next 4-6 weeks we will see more inventory than we have since spring 2020! And if more buyers are in the game earlier this year, there is a good chance that we will see less competition as we head further into the year. So stay strong buyers - your time will come!
All statistics graciously provided by Megan Aller, First American Title Company
