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Denver's Home Inventory and the Truth

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.

Show All Comments Sort:
Mark Beyerle
Your Castle Real Estate - Denver, CO

It seems like you have really done your homework!  This information is extremely impressive, and informative, thank you so much! 

Nov 02, 2008 02:51 PM
Ben Dorland
Porchlight Real Estate Group - Denver, CO

It is great to see with all the information that is thrown out there that you can put it in a very understandable and easily read form.

Nov 10, 2008 10:31 PM
Gene Elzenberger
Your Castle Real Estate - Denver, CO

It is great to see with all the information that is thrown out there that you can put it in a very understandable and easily read form.

Nov 11, 2008 10:36 AM
Lori Erickson
Your Castle Real Estate - Greenwood Village, CO

Wow, fantastic information.  It seems that the markets with higher priced homes and lots of square footage are really only beginning to see the slow down. 

Nov 11, 2008 10:42 AM
Brian Evins
Your Castle Real Estate - Littleton, CO

Just as in any market, the price point will plays a huge role on how long the property will stay on the market.  Your clients just need to be very weary of what is going on in their market.

Nov 11, 2008 10:47 AM
Demetri Fefes
Your Castle Real Estate - Denver, CO

hopefully Littleton will not follow what is happening around it in Lakewood, and Castle Rock.  It will be interesting to see what happens the next few quarters.

Nov 11, 2008 10:53 AM
Riley Floyd
Your Castle Real Estate - Lakewood, CO

Why have places like Wheat Ridge and Golden done so well?  I hope that places like Littleton follow their success in the near future.

Nov 11, 2008 11:00 AM