Metro Denver Real Estate Market Warms Up A Little Bit More

The market continues to take positive steps forward as we look at numbers for the week of January 16th through 22nd in the seven county Metro Denver and across all home price points. Pending transactions were up by another 6.2% while new inventory lagged at -.8%. Additionally, the predicted months supply of inventory dropped by 7.8% to a very low 1.1 months. If months supply of inventory drops under one month this usually signifies multiple offer territory. Eeek, is that where we are headed?! I’ll get to that in a second.

So, prior to the pandemic years our market leaned toward a typical seasonality. As of right now housing market activity is expected to return to that seasonal cadence. The kick off to our local market usually occurs the week after the Super Bowl (which I like for the commercials and tight pants;) with about a 30-40% pick up in showing activity and pending transactions. Activity builds month over month from March through May with a decrease in activity usually noted in June. 

Inventory will be the topic of a lot of conversations this year. Right now we are sitting at 19% of the units required to reach a balanced market. This translates to presently having just under 4,300 units available when we require about 22,500 to be in what is considered balanced by the National Associations of Realtors (NAR) definition of six months of inventory. For context, the last time our market was in balance per inventory count was at the end of 2012, beginning of 2013, per Megan Aller at First American Title. 

Should we get into a situation where the amount of new inventory is not a meaningful amount to shift months supply we could be headed into a compression cycle. A compression cycle is when we are selling more homes than are available for folks to purchase. In compression cycles we tend to see month over month increases in values. A compression cycle is unlikely for all neighborhoods and will be a result for neighborhoods with very lean inventory. 

For folks who are positioned to purchase a home there are healthy opportunities to put homes under contract while there are fewer competing parties in the market. As the market continues to warm up over Spring some homes located in neighborhoods with low inventory may be in multiple offer situations again. For home sellers, being strategic is the name of the game right now. Property preparation and an educated and thoughtful list/asking price for your home is most prudent for attracting the right buyer-clientele. 

Big ups to Megan Aller at First American Title and Nicole Reuth with One Trust Mortgage who keep me, and so many agents of Metro Denver, in the know. 

For more information on the Denver real estate market please reach out to Cherish McClure.