Denver Real Estate Market:High-end Expands, But Inventory Remained Lowest in Nation
After last year’s feeding frenzy, inventory in many central Denver neighborhoods became depleted, prompting a citywide seller’s market. Prices rose over the winter to meet demand, with a predicable result — some homeowners who have been waiting to list their homes have finally placed them on the market.
Denver Inventory Expands at the Top, Shrinks at the Middle
However, not all parts of the market have responsed equally. While the high-end Denver real estate market expanded 5.5 percent year over year in May, a lack of inventory persists in middle and lower-end homes. The inventory of middle tier homes, with a median price of $247,000, actually decreased 4.5 percent, and bottom tier homes decreased one percent.
But the Lack of Denver Inventory Overall is Critical
Overall, the Denver real estate market has less than a half month’s supply of inventory, making it the lowest of 52 metropolitan areas tracked by the industry. The lack of homes on the Denver market has intensified dramatically — at the beginning of 2014, for instance, there was a 1.1 month supply of inventory.
Affordable Housing Market Tightens in Nationwide Seller’s Market
Nationwide, there is a 3.8 month supply of available inventory. That may seem generous in comparsion with Denver’s figures, but a six month’s supply is considered an optimal balance between supply and demand in the real estate market.
Like Denver, the whole country saw an expansion of inventory at the upper and middle tier levels. The national average for these markets is higher, 11.8 percent year over year in May. Interestingly, bottom tier inventory also declined nationwide, making it difficult for first-time homebuyers and lower income people to get into the real estate market.
The bottom line: Denver represents an extreme example of what is becoming a national trend. Across the United States, real estate agents have changed their tune. After wondering for years how to get people interested in buying the multiple properties on the market, they now wonder how they can coax homeowners to list that home they have been reluctant to put on the market.
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