The inventory of homes in Denver hit an all-time low last month, forcing homebuyers to fight amongst themselves.
At the end of August, there were 5,496 active listings, which is 41 percent less than a year prior, according to the Denver Metro Association of Realtors. In particular, single-family homes were scarce, and the average home price reached a new record high of $606,330.
“It’s unfortunate for buyers. But wow, sellers are doing well and gaining equity every month,” said Jill Schafer, chair of the market trends committee at DMAR and broker for Kentwood Real Estate. “People are fighting over homes if it’s priced right and in good condition.”
The association’s numbers pertain to an 11-county region it considers the metro area. Those counties are Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson and Park.
Buyers closed on an all-time high number of homes in July. Home sales dropped by nearly 19 percent in August, to 5,959 sales. But that was still the most sales of any August on record.
“We’re selling out like crazy. I also think people are hesitant to move, possibly because of the pandemic, but more so because when looking for a place to move, they don’t see anything out there because inventory is so low,” Schafer said. “I call it the vicious circle.”
Demand for homes remains high as interest rates remain low, she added. On average, buyers paid more than the full asking price for detached homes and nearly full price for attached.
“It just shows real estate is a fabulous investment, but it increases our housing dilemma of people not being able to get in and get a house,” Schafer said. “And rent rates are still high.”
The Denver market is a seller’s market across the board with the exception of luxury condos priced over $1 million, where the market is equal for both buyers and sellers. There are 5.3 months’ worth of inventory in the luxury condo market, the highest of any market segment that DMAR tracks. But Schafer said buyers are shifting toward attached homes as detached inventory continues to drop.
Despite the tight inventory, pending contracts were up nearly 8 percent month over month and nearly 33 percent year over year.
“Since pendings are up, I expect we’ll see closings up next month, but I’m not expecting to see an influx in active listings,” Schafer said. “Inventory could tighten even more and push prices up even more. It’s tough for buyers. They’ll have to be patient, keep trying and might even have to make some sacrifices. But I think it will be worth it for them in the long run.”