After months of exceedingly tight inventory, the number of houses for sale in the Denver area rose dramatically in June, prompting equally dramatic commentary from some industry experts.
“Just like the sound of a powerful M-80 firecracker bursting over the skies Fourth of July weekend,” noted Anthony Rael, “Denver’s real estate market exploded with a flurry of new listings and ended the month with a dazzling display of active inventory.”
Rael is chairman of the Denver Metro Association of Realtors (DMAR) Trends Committee. He was reacting to DMAR’s monthly market report, which showed a whopping 24% increase in active listings of single-family homes and condos in the month of June, compared to May. The report also noted that active listings increased 9.67% over June of 2015.
REcolorado, the largest Multiple Listing Service in Colorado, reported similar, but slightly lower increases. Its monthly market report showed active listings up 22% in June over May, and a 7% rise of active listings over June of 2015.
Why the new wave of sellers?
Rael credits Brexit, Britain’s decision to leave the European Union, with sparking the increase. As the Federal Reserve reacts to the news, mortgage rates have plunged to the lowest level in three years.
“On the heels of Brexit, which caused mortgage interest rates to plummet even lower the past two weeks,” said Rael, “we welcomed a pint-sized boom in single-family listings as fellow real estate agents pounded the streets seeking properties for hungry homebuyers who are nipping to get under contract, locked, and closed as soon as possible.”
Although home prices are still on the rise (up 3% in June over May, according to REcolorado), the news of greater inventory should delight buyers, who have been frustrated by the tight market, often participating in fierce bidding wars in recent months in order to prevail in a sales transaction.
A recent CBSDenver report should be cause for further optimism. The report noted that the home sales frenzy appears to be cooling somewhat in the suburbs. Instead of only considering cash buyers, notes the news channel, suburban sellers “have started to consider contingency offers, where a potential buyer must sell his or her home before being able to purchase another one. That has also resulted in fewer back up offers, maybe one or two compared with up to six just a few months ago.”
If buyers are seeing light in the market, the report made it clear that sellers are still reaping great rewards: The average sold price in Denver in June was $418,747, according to REcolorado, marking a 12% rise in sold prices over June of 2015.