This market update was discussed in the April 2019 roundup.
The amount of active listings has increased by 36% from last April. This equates to a little over 1,600 additional listings from 2018. The Days On Market has made a 66% jump! However, this has only increased the Days On Market from 6 to 10. Properties in Denver are still being sold very quickly even with the small amount of inventory that is slowly being added.
The total amount of Under Contract properties is up 4% year over year and over 27% from March 2019. This is what we expected to happen and was discussed in our last roundup. There could be multiple factors that lead to this increase but the bad weather in March, a decrease in interest rates, and an increase in inventory have given more buyers the opportunity to purchase a home.
The active inventory for the Denver market is slowly rising but is still extremely low. If you look at the inventory from a 10 year period you can see we are still far below the amount of inventory that is needed to satiate the number of buyers who are still looking to purchase. As inventory rises the amount of homes sold is rising as well. This is a healthy spread and is not indicative of a real estate bubble in the market.
4 to 6 months of available inventory indicates a well balanced real estate market. Since 2011 the Denver market has very much been in favor of the seller’s. Even as our inventory continues to grow we are still not approaching a seller’s market. We are currently still below 2 months of inventory, indicating that our inventory could double and we would still not consider the Denver market to be balanced.
The last 5 years concession has remained fairly consistent in the Denver market. Around 30% of the total amount of homes sold were providing concessions to the buyers and the total concession amount was steady at about 1% of the purchase price. Since Q3 in 2018, we have started to see an increase in the number of sellers who are willing to provide concessions, even though the amount has been about the same. This increase is to be expected. As inventory rises and sellers prefer their properties not to go back on the market they are willing to negotiate small sums to ensure a timely close. Going back on the market could require the homeowner to make another mortgage payment which could be more costly than the concessions.