I swear this house was for sale yesterday...
The excitement for an increase in inventory is never long lasting for a Colorado real estate agent. It has been a heck of a roller coaster ride for a few years now. Just when the market looks like we are going to add a positive gain in inventory we go and sell all the existing listings. It is a wonderful thing for the sellers but it is rather annoying for our buyers out here. The other day I was talking to my buddy at Caliber Home Loans, Mike Sadowski, and we were looking at the new listings vs sales and we were kind of excited about what the numbers were showing. Then looking at it today and we basically sold those and then some! Instead of breaking it down to Evergreen, Conifer, Golden and Denver this week we will look at the Denver real estate market as a whole. We see on the chart to the right the numbers for the entire Denver MLS for residential activity over the last 7 days. This chart is pretty similar to what we have seen for years now. The market is seeing a drastic difference in new listings to sales ratio. One interesting thing we see is all the indicators show a strong sellers market still. All but one. There were a lot more price Decreases than normal. This is showing the market that buyers will buy if the price is in the proper range. Not over paying though.
Entire Denver MLS Days on Market
Another huge indicator for the market that is talked about in all our market updates is the days on market or the average DOM. This is an important number to let you know the interest in a market. Although the days on market are higher than the summer, they are still very low and are trending lower after our spike for the years in December (which is perfectly normal). That trend lower will continue to trend lower through the summer. That has been the case even though we do add more homes in the summer we tend to sell at a faster pace. Last summer we had a considerable amount of multiple offers on the first day of listing and a good deal of homes going under contract for above list price. This summer should not be as crazy but we do expect another summer with lower inventory and short days on market. This is why your agent should be stressing to you to speak to a mortgage lender and get pre-approved before you go and look at home. In this type of market hour really do matter when making an offer. If it takes you a few hours or until Monday to get your lender letter, you could have already lost the house.
Number of Sales Across the MLS
This one was actually a bug shocker to me as I was gathering charts for this blog. My jaw dropped when I saw the difference between last summer and the drastic decline in number of closed sales. Again these number reflect the entire MLS. It is close to 25% of the peak of the trailing 12 month chart. This one right here is going to truly test the buyer/seller balance. This is actually going to help the buyers regain some footing. Reason is 1. we are seeing slight downtrends in sale prices. 2. We are seeing less days on market but way less sales. The number of sales are decreasing way faster than DOM. These indicators are all pointing to it still being a bit of a sellers market but buyers will not over pay (we are seeing this with the price reductions). Either way if it is a buyer market or seller market, It will continue to be a healthy market. There will be a lot of movement and homes being sold over the next 6 months.
it is important to find the proper price to list your home
The numbers show that a properly priced home sells quickly in this market and has for a few years now. It is true that there was some time last summer that the buyers seemed to have been panicking and buyer with emotion instead of listening to their head and worst yet their real estate agent. There were times where my clients were in bidding wars and asking me things that in a normal market would never advise to them. I still didn’t advise them to make crazy purchases. I lost an offer last June. It was a home that in the long run the people that bought it won the offer with a total cash offer, 10% of list, appraisal conditions waved and home inspections waved. It was hard for me to convince my buyers to buy a home that you are going in with at least 10% negative equity and possible material defects that could have been discovered.
Home buyers and investors are still loving the interest rates that are still feeding market demand
Home buyers are still loving the the low interest rates and continue to help spark market demand. The real estate market in Colorado is seeing real estate investments rise even with a sharp rise in home prices. This is nothing like the finical crisis. There were a lot more variable in play for that scenario to play out. It is still a great market to enter in as an investor. Fix and flips are a little tricky right now but rents continue to increase and investment properties and VRBO rentals are hot!