Market Data September 15, 2022

Balancing Market?

Even though buyer demand has moderated and housing supply has increased in recent months, the market can still be considered a Seller’s Market because inventory is still low. 📉

According to data from NAR, sellers continue to benefit from competitive offers and serious buyers. In July, for example, the average home received 2.8 offers and 39% actually sold above the asking price. 💰

In other words, while the market is in fact cooling off, you certainly haven’t missed your chance to sell your home. Partner with a real estate professional today to get started on your home selling journey! 🏠

Market Data June 3, 2021

Calculating Risk with Home Values

The economic research blog called “Calculated Risk” just completed a fascinating study on home prices.

Specifically, they looked at the correlation between home price growth and inventory.

They used price data from the Case-Shiller Home Price Index and inventory data from the National Association of Realtors.

No surprise, they found that the lower the inventory the higher the home price growth.  Also no surprise, as inventory goes up, price growth slows down.

This all correlates with simple economic rules of supply and demand.

The interesting part of their research is this:  at a certain level of inventory, prices have the potential to go down.

That level, according to their research, is six months of inventory.

That means, prices don’t have a chance of decreasing in a market until there is at least 6 months of inventory available for sale.

To put that in perspective, today there is two weeks of inventory on the market along Colorado’s Front Range.

So, there would need to be 12 times the amount of homes for sale on the market for prices to even have a chance to go down.

Market Data July 10, 2020

More Homes Needed to Balance Market

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Compared to exactly one year ago, the supply of homes is down:

  • 32.6% in Metro Denver
  • 25.1% in Northern Colorado

An interesting and useful measurement we track is months of inventory.  This stat tells how long it would take to sell all of the homes currently for sale at the current pace of sales.

Of course, months of supply can vary greatly by price range and location.  However, this stat does a good job of explaining the overall state of the market.

Specifically, months of supply tells us if the market is in balance.

A ‘balanced’ market is when there is 4 to 6 months of supply.  A buyers market occurs when the stat is higher than this range.  A sellers market occurs when it is lower.

The months of supply looks like this in our market:

  • 1.0 months in Metro Denver
  • 1.3 months in Northern Colorado

What this means is our markets are significantly under-supplied and more homes are needed to meet demand. With that being the case you can expect that overall property values will continue to rise for the foreseeable future.