October is here. What’s the market doing?
Welcome to Market Monday, where we review the Denver real estate market and break it down into clear and informative bites! If you have any specific questions or areas of the market you’re curious about, reach out and I will do my best to get you an answer.
All you autumn-lovers are probably thrilled that it’s October - I know I am! In past Octobers, we would expect to see a seasonal cooling, as the buyer pool recedes a bit due to school and football coming back, weather changes, etc. However, given that 2020 is continuing in 2020 fashion, we can toss our predictions out the window.
We are looking at record low active inventory. 2020 has the record low September in our market, with 5301 active listings (attached and detached, as DMAR measures them). The prior record low for September was in 2017, with 7516. Just from September 2019 to September 2020, the drop in active inventory was a whopping 42.91%! If you’re a buyer right now, you are definitely feeling this shortage - likely facing competition in the form of multiple offers - or properties accepting contracts before you can even get out to see them.
Where is all the inventory? Why aren’t potential sellers listing their homes? Could be lots of reasons. We tend to see a lower amount of inventory at this time of year anyway, with school starting back up and the weather changing. That is obviously compounded by the unique nature of 2020 - concerns about listing your home during a global pandemic, even with all the precautionary instructions in the world, are real. Would you want any number of strangers walking through your home right now? Another factor is equity - if a seller has owned their home for at least a few years, they likely have a comfortably equity cushion and may be able to draw on that via a HELOC or cash-out refinance to make updates that may have, in another time, pushed them to sell and move instead.
That low inventory (and the high buyer demand we’ve seen most of the year) creates incredibly positive odds of selling. Megan Aller measures this as “a calculation of all homes available for sale vs those that resulted in a buyer and seller agreeing to terms of a contract in a specific month.” August 2020 had the record high odds of selling, at 73.4%. To put that in perspective, average since 2005 is 39.9%, and average from Augusts 2013-2019 was 50.7%. If you are in a position to sell, now is the best time we’ve seen.
To break down the odds of selling just a bit, take a look at the graph here (Odds of Selling by Price). The highest odds of selling are - unsurprisingly - in the $200,000 - $399,000 price range - with the most potential buyers, this price point is seeing the most competition. It is followed closely by $400,000 - $599,000. If your target sale price is in either of those ranges, you are likely in great shape to sell.
If you are thinking about buying (or out in the market trying to buy right now), you may look at this and feel overwhelmed, frustrated, or hopeless. I hear you, I feel you, and I’m with you! Even with this low inventory, we may start to see the buyer pool fatigue and fall away just a bit - hopefully leaving just a little opportunity for you. If you want a guide and advocate to help you seize that opportunity, I would love to be of service. Email, call, message, text… I’m here and I want to help you with a strategy to win.
Questions or Comments? Leave them below or contact me at the button!
Numbers and stats from Megan Aller, First American Title and Denver Metro Association of Realtors.