Denver Real Estate Market Explodes

It’s official! The Denver real estate market has recovered from the worst housing recession since the 1980’s. Home sales have exploded while the supply of homes for sale has decreased. The only problem is that this is both good and bad news.

Inventory of existing homes for sale has steadily decreased from a high of 26,333 homes for sale to 7275 at the end of 2013. Denver home sales increased every month in 2013 over the same months in 2012.

It’s great news if you are a Seller. The value of your property is likely the highest it has been since 2006. Fewer and fewer homes are on the market. Even this month more homes have sold every week than new listings have come onto the market according to Denver MLS statistics. So, homes are selling at record prices and in record time.

Lon Welsh of Your Castle Real Estate delivered the good news to his agents recently in the video above.

A good home in a good neighborhood will sell in week. If this year mimics the last three years of sales in the Denver real estate market, that marketing time will be cut in half by March. And, those good homes will receive multiple offers and sell above list price.

Of course, this not good news if you are a buyer. In the next several weeks, competition for those good homes is likely to increase driving prices to even higher levels. What should a buyer do in this competitive market? Here’s a thought. Add this question to your list of questions when inerviewing to hire a Denver real estate agent. “What sources do you have besides the Denver MLS to find homes for sale?”

Good Realtors will have some creative answers. Here is the follow-up question. “What was the last house you found and sold when you used that method?

For example, Jason Cummings of our Hotz Group at Kentwood Company found several homes for buyers that were not listed in the Denver MLS. He called folks he had sold homes to over the last several years matching the criteria of the buyers. He then asked if they were thinking about selling. He sold 5 homes this way in 2013.

Denver has now set record home sale prices. Average prices are likely to continue to increase until either sales retreat from record highs or the number of homes for sale dramatically increase.

So, our market has a shortage of homes for sale and prices are rising. We are about to enter the Spring Selling Season when historically real estate sales surge. How long can this continue. I think the answer is question. How long will interest rates stay at or near the historic lows? sales will likely slow slightly as interest rates increase. But, when those mortgage loan rates near or exceed 6% sales will likely slow. When sales slow, the number of homes for sale will increase. That’s how it works in real estate.

Ultimately, the laws of supply of homes and demand to buy them will effect rising prices. But, don’t count on that to happen in 2014. These charts suggest the trend is likely to continue for some time to come.