Denver’s housing market, long characterized by tight inventory, tightened even further in January, to a new historic low.
“Last year at this time, there was little inventory,” notes the monthly report from the Denver Metro Association of Realtors (DMAR). “This year, there’s nearly half as much at 48.8% less.”
While January usually sees a 70% increase in new listings over December, this January saw a decrease of 17.77%. The number of single family residences for sale was 1,184. The average active listings for January is 12,732, since record keeping began in 1985.
“That is over ten times less inventory than normal,” wrote Andrew Abrams, chair of the DMAR Market Trends Committee in the report. “Just imagine how many brick-and-mortar clothing stores there are. Once you get to ten, remove nine of them and shop there exclusively. Welcome to a buyer’s life in this market.”
Indeed, buyers face daunting challenges in this market. “January started with a blast with more competing offers, appraisal gap language, inspection waivers, free post-closing occupancy periods, earnest money going hard and every other trick buyers can think of to be the winning offer,” notes the DMAR report.
Abrams recalls one of his clients offering $140,000 over the asking price, only to be outbid by another buyer offering around $190,000 over the list price. The story is different with each home, he cautions, noting that he’s also had buyers successfully submit a below-asking price offer.
Interestingly, DMAR reports that homes still standing in the Marshall Fire burn areas are selling over the asking price, and at a rapid pace. “There were 17 homes under contract that sold within two days of being on the market,” according to the report.
Abrams implores buyers to do their research before shopping for homes. “Look at some houses that have recently sold,” he told 9News. “Look at the list price and then what it actually closed at to understand how much above asking is normal in that area. … So when you walk into that house, you’re ready to make a decision by the time you walk out the door,” he said.
The good news is that once buyers find a home, they can rest assured it will be a solid investment. A recent Gallup poll rated real estate “as the best long-term investment for eight years in a row,” reports DMAR.
Abrams concurs. “Even with these difficulties,” he notes, “homeownership has never been more valuable and will continue to hold great value.”