You don’t have to be in the market for a new home to know the Denver real estate market has been off the charts in 2015. This seller’s market has people across the country talking and buyers going to extraordinary lengths to land a home.
How Did We Get Here?
The Denver real estate market really started to improve in early 2014, bringing brisk sales early in the year. Typically real estate sales slow through the holiday months, and pick up the pace in February. In 2014, however, the number of available homes declined but sales stayed strong through December.
The listing to sales ration in 2014 had twice as many homes listed for sale as there were actual sales in any given month. The squeeze came in March 2015, when 73% of the properties listed were sold. For the next 4 months sales increased at the same rate as listings, and the buying frenzy was in full swing. Buyers in some price ranges were competing with 40 and 50 other offers for the same home.
Early July saw a mild shift and for the first time this year we saw inventory increase but sales turn and decrease slightly from the previous month. Instead of sellers getting 40 offers on their home, they were getting five. While this is still a strong seller’s market, there has been a clear shift in demand.
As current home owners feel more comfortable they can find a replacement home and put their property on the market, buyers will have better options and more time to select their next home. Plus, as new home builders begin to catch up to buyer demand, the available inventory should continue to increase.
There are still a lot of renters wanting to get out of the high lease rates and purchase their own home. In some cases renters can buy a home and pay less that their current rent. Looking ahead, as long as interest rates stay low, our seller’s market will continue to dominate. Expect sales to stay strong through the holidays and into early 2016.