It is amazing to see how well the Denver Metro Residential Real Estate Market is doing right now!
Demand is very strong with showing activity 18.5% higher YOY and very low interest rates. The active buyers in the market had nearly 6,000 contracts accepted on homes. These contracts represent an increase of 25.8% YOY. Closings are steadily outpacing last year, and we expect to see that in Q4 as well.
One significant headwind in the market is the lack of inventory. Active listings are down (37.5%) from this time last year. This means there are more buyers in the market, and they have fewer options to choose from.
The combination of strong demand, lower interest rates, and lower inventory has put upward pressure on prices. In fact, the market saw an increase in the average sales price of 11.4% when compared to August of 2019.
The months of inventory measurements helps us identify what kind of market we are in. If we have 0-3 months of inventory, we are in a seller's market and prices will be going up. If we have 4-6 months of inventory, we are in a balanced market where neither the buyer nor seller has the upper hand. If we have 7 or more months of inventory we are in a buyer's market where prices will come down. As of September 2020, we have 1 month of inventory, so we are firmly in a seller's market.
Demand is strong. Supply is low. Sales prices are up, and months of inventory are low. All of these factors indicate the Denver Metro Residential Real Estate Market is quite healthy!
Here is a link to a 2 minute video highlighting the major points: