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The Truth about Lone Tree's Home Inventory

By
Real Estate Agent with Your Castle Real Estate





If you have not heard already, the inventory of home on the market in Denver has been declining. This is not true in many regions of the county. Your clients, who often only see national headlines, might not be aware of this favorable news. Our market has some unusual factors at work. Let's explore them, so you can better help your clients.

If you look at the first chart (MOI 1), you'll see the MOI (months of inventory) for Denver's suburbs on the bottom axis and the average sales price in that suburb on the axis on the left side. Denver metro currently has about six months of inventory (a balanced market, on average), but you can see there is a lot of variety from one city to the next. Lower cost areas, such as Thornton, are seeing inventory move fast. Sellers (mainly banks) don't have to wait long for offers. Thornton's average price in the last year was around $250,000 and the average MOI was about 3 months. Greenwood Village, on the other end of the scale, had about 13 MOI and an average price of about $1.4 million. Sellers are suffering there. The city of Denver is about in the middle.

If you look at the second chart (MOI 2), you'll see the MOI information sorted by the price of the home. In some cases, this might be more useful when you meet with clients. The city of Denver, for example, has many neighborhoods with homes under $100,000, and they are selling fast. On the other hand, upscale neighborhoods like Cherry Creek and Hilltop have significant levels of inventory and it's taking a long time to get homes sold, especially over the $1 million price barrier.

The left part of the chart show what percent of the active listings are REO (in red) and which are regular sellers (in green). For homes priced between $0 and $100K, regular (e.g.,, non-bank) sellers are 17% of the active inventory, but only 12% of the sales in the last twelve months. You can see on the left that since they are not getting their "fair share" of the sales, the MOI for the regular sellers under $100K is 2.7 months. For REO under $100K, it's a blazing 1.9 months. This probably isn't a surprise to any Realtor that has written an offer for a low priced REO and the listing agent has told them their buyer is competing with ten other offers. It's a strong seller's market at this price point!

Compare the homes from $480K to $1MM. Here, MOI is around 14 months - a very slow market. Your seller's experience with marketing time depends greatly on their price. I hope this information will help you demystify our market for your clients.

 

(c) Copyright 2008, Your Castle Real Estate

Show All Comments Sort:
Brandon Gill
Your Castle Real Estate - Aurora, CO

As professionals we definitely need more information like this.  We need to be educated and keep our clients on top of what is going on in each local market.  Thanks for the great info, keep it up.

Oct 18, 2008 02:14 PM
Joe Heffley
Your Castle Real Estate - Highlands Ranch, CO

Excellent information.  The data only confirms what we are seeing on the ground.   With information like this my investors and owner occupants can be more educated on making an informed decision.

Oct 18, 2008 02:19 PM
Brandon Gill
Your Castle Real Estate - Aurora, CO

Wow!  With all of the negative press on the real estate market it is really great to see how each local market is actually doing independently of one another.  It makes sense when you see the map on where many areas are declining.  My question is, will the declining markets shift in the next few quarters?

Oct 19, 2008 03:56 PM
Joe Heffley
Your Castle Real Estate - Highlands Ranch, CO

It is amazing to see how much some of these markets have dropped and look like they are continuing to drop.  I hope the bottom is near for some of these communities.  On the flip side, what a great market to buy an investment in, right?

Oct 19, 2008 04:10 PM
Lori Hinsberg
Your Castle Real Estate - Castle Rock, CO

It is amazing to see how much some of these markets have dropped and look like they are continuing to drop.  I hope the bottom is near for some of these communities.  On the flip side, what a great market to buy an investment in, right?

Oct 19, 2008 04:19 PM
Todd Houghton
Your Castle Real Estate - Aurora, CO

I saw an article in the paper about how many of owner occupants are having a really hard time competing with investors.  It seems that even though prices are still declining, the listing brokers for banks are creating bidding situations.

Oct 19, 2008 04:23 PM
Laurie James
Your Castle Real Estate - Englewood, CO

Thanks for the overview.  Knowledge is power and we need to make sure our clients and peers are informed.  I can't wait to see the next versin of this blog.  Our clients will continue to benefit from the great info you are posting.

Oct 19, 2008 05:10 PM
Jim Goffred
Your Castle Real Estate - Parker, CO

Have you heard that the days on market have been decreasing the last two months?  I think that maybe we are past the bottom and climbing on up. It will still take some time but I'm seeing the first signs of things turning around.

Oct 22, 2008 04:46 PM
Jim Goffred
Your Castle Real Estate - Parker, CO

Wow!  With all of the negative press on the real estate market it is really great to see how each local market is actually doing independently of one another.  It makes sense when you see the map on where many areas are declining.  My question is, will the declining markets "shift in the next few quarters?

Oct 25, 2008 02:57 PM