The MLS Inventory Crisis
For about the past nine years, the news has shown headlines reporting the slow decline of Denver homes for sale. In January 2020, there were approximately 11,670 active detached homes in the Denver MLS. Also, there were only about three months of inventory. That means that if sellers stopped putting homes on the market, there would be zero homes on the market in three months.
Now, in January 2021 there were only 3,550 active homes in the Denver MLS. Because of that limited amount of homes and the influx of buyers in the market, the Denver home inventory crisis has become even more alarming.
This horrible pandemic has created numerous repercussions on the housing market. Those drove demand up and supply down at a rapid rate. So, these factors helped to create a Denver home inventory crisis.
What Created this Denver Home Inventory Crisis?
- Pandemic Germs: The extremely contagious coronavirus had many homeowners quarantined. Many homeowners don’t feel comfortable allowing a parade of strangers into their homes.
- Unemployment: As the country (and world) shut down, many people lost their jobs, were furloughed, and found themselves in unfortunate financial situations. In order to purchase a home, you have to show proof of employment. So, if you want to move and purchase a new house unless you have a job, that’s not going to be easy. It’s tough to sell a home if you have nowhere to go.
- Low-Interest Rates: The historic low-interest rates have inspired many buyers to jump into the buyer pool. These buyers can afford more of a home due to the low-interest rates.
- Relocation: Many fortune 500 companies have decided to move their headquarters to Denver. With these companies moving here, so do a large part of their workforce.
- Working/Schooling from Home: A surge in buyers has also been catalyzed by homeowners being stuck at home. Whether they are desiring to move from a smaller house to a larger home or a condo to a detached house, these buyers are adding to the demand for single-family detached homes. On the other hand, sellers are also working/schooling from home. Which makes it difficult for them to get out of the house for showings.
I’m hoping that as the vaccine becomes more widely available and as people return to their schools and offices. Then, we will see an uptick in the number of homes on the market. More sellers will be willing to open their homes and finally move. Hopefully, that will help relieve some of the Denver home inventory crisis.
Can You Even Schedule a Showing Now?
Right now, in some price points, it’s extremely difficult to even get a showing scheduled. Last year at this time, pre-pandemic, we were allowed to make overlapping showings appointments and typically the showing window was 2 hours. This allowed for people to have time to wait outside while other showings were occurring without screwing up a buyer’s home tour. Now, post-pandemic, overlapping showings are not allowed. Agents are limited to 5 to 30-minute showing windows, at the discretion of the seller.
There were 3,248 active listings priced $400,000 to $499,999 in January 2020. On these 3,248 active listings, there were 22,416 showings. In January 2021, there were 1,199 active listings priced between $400,000 and $499,999 and 32,148 showings on these listings. Therefore, a year ago (even with allowing overlapping showings, which was not allowed in January 2021) there was an average of 7 showings per property. And, in January 2021 there was an average of 26 showings per property!
The Solution is to Get A Good Realtor
First and foremost, if you’re going to be a buyer in this crazy market, you need good representation from a top Denver Realtor. The Denver home inventory crisis is really only a crisis if you don’t have a good team. A good realtor is going to educate you on how to submit a competitive offer in this market. Also, you’re going to need someone who can be quick to respond to you. Next, you need an amazing lender. Your lender is just as important as your Realtor. If they can’t give a listing agent complete confidence that they can close your loan, then your offer won’t be nearly as competitive as those buyers who do have an A+ lender.
We, The Hotz Group, now use a proprietary lender who will actually turn your offer into a cash offer. That’s right. You get the home with a mortgage loan. But, the lender actually buys the home first for cash. There is no catch, no downside, and you absolutely must learn more about this truly unique option. It’s the only you can compete with cash offers and still get a Denver home mortgage.
You can get an offer to stand out and potentially save thousands of dollars by using this program. Although there is a Denver home inventory crisis, we are staying creative to ensure we give our clients the best service possible. Please feel free to reach out directly to me for more information by filling out the form below.