Potential home buyers just cannot find enough selection of Denver homes for sale. Realtors have bemoaned that single reality for over 7 years now. What’s worse? Every home that sells fetches a higher price that the last similar home that sold.
When the sheer number of single homes for sale started to build going into the “Spring Selling Season” some were predicting another Denver real estate bubble. But, most Realtors were just thankful to have more homes to show buyers.
Supply of Denver Homes for Sales Drops Again
Well, that didn’t last long. The more than 7100 homes for sale in July began dropping again in August. Already, that inventory of available homes to buy in Metro Denver shrank to only 5959 in October according to the Denver MLS. And, the the direction points to even fewer Denver homes for sale until at least next Spring when competition and prices that to increase again.
Lon Welsh, former Blogger here on All Denver Real Estate and Owner of Your Castle Real Estate recently put it this way:” In the first half of 2019, inventory was up +20% or so from same period last year. However, last July 2018, interest rates increased rapidly, then buyers lost some interest in purchasing. As a result, inventories in the late summer / early fall 2018 increased quickly. The September 2019 inventory was only +5% from September 2018. There was essentially no change in inventory between August, 2019 and September 2019. The inventory build seems to have stabilized.”
Since he said that last month, the build of inventory has actually reversed rather dramatically. Don’t forget, now the number of homes for sale reduced to 5959. That’s 8% lower than a year ago. Yes, the could easily decrease even more soon. after all, we are in the fourth straight month of inventory drop.
Sales of Denver Homes Increasing
You might be wondering how sales of existing homes doing. Well, they have actually increased 10% from full-month September 2018 to September 2019 in the Denver metro area.
So, supply is dropping and demand is increasing. I remember from my high school economics class that usually means prices are increasing. In fact, median home prices in the Denver metro rose 7.7% from this time last year.
Denver Real Estate Bubble
Does all this suggest the return of the Denver real estate bubble? Lon says: “Don’t expect foreclosures or short sales to return anytime soon. Additionally, Colorado has some of the lowest mortgage delinquency rates (over 90 days late) of any state in the US. There’s no evidence of a bubble like we had in 2007.”
The Queen of Denver real estate statistics, Megan Aller, echoed many these thoughts in her video interview on this All Denver Real Estate Blog last month. As long as the demand for homes stays high and the inventory stays low, don’t expect a bubble, housing recession or lower real estate prices anytime soon.
“Build it and they will come”, was the most remembered line in “Field of Dreams”. Fact is, they are continuing to come to Denver even though we can’t build enough homes to keep up with demand. When folks quit asking if we are approaching another real estate bubble, that’s when I will start worrying!