According to the Denver Metro Association of Realtors’ (DMAR) latest monthly report, there were 3,878 homes listed for sale during February. This is a decrease of 2.78% from January and 2.14% from the previous February. According to DMAR, this represents “an all-time low for any month on record, and only the third time active listings have dropped below 4,000.” By contrast, the average number of active listings for February (recorded between 1985-2016) is 14,635—more than three times higher than the current number. The record high is 25,484.
Given the small number of homes for sale in a city that continues to grow at a rapid rate, homebuyers are facing high-pressured competition. It’s not unusual to have as many as 20 showings in one day. “It’s no longer surprising to have multiple real estate agents conducting a showing of the same property at the same time,” notes the DMAR, which adds that multiple offers on a single property are common.
As a result, buyers are taking aggressive measures to secure a home. These include adding escalation clauses in their contracts, appraisal guarantees, writing personal letters to sellers that appeal to the homeowners’ emotions, increased earnest money and minimizing inspection contingencies.
In short, sellers remain in the catbird seat – and likely will be for some time, according to some experts, who note that the lack of inventory creates a vicious circle that will be hard to break. “In a twisted loop,” notes the Denver Post, “the lack of inventory discourages potential sellers from listing their homes, making the inventory even tighter and discouraging even more sellers from listing.”
“It becomes a self-fulfilling prophecy,” one expert told the Post.