Nobody Liked Musical Chairs As a Kid Anyway, Did They?
The Front Range real estate market continues to keep everyone on their toes
Over the last several years, Denver’s real estate market has played out quite similar to a game of musical chairs. With decreasing inventory and increasing population, the minute a seat was removed during a tune, the player was forced to find refuge somewhere else.
In many ways, this has benefited our more suburban and outlying areas – Colorado Springs in particular. The shift, however, has left the remaining players feeling tremendous pressure. Pressure not only for buyers to find the first seat they could, but also that of sellers not to stand up in the first place. The conundrum begs the question of whether we’re seeing less housing in our area or just the reduced likelihood that anyone would stand up in the first place. The data shows that we are experiencing a whole lot of both.
The Front Range continued a mellowing out in October, showing that perhaps this game was beginning to take a turn. Between Octobers of 2016 and ’17, the inventory of available homes has decreased a staggering 25.8 percent in the Metro Region according to reports by the Colorado Association of REALTORS® (CAR). The data further demonstrates that a home is indeed able to gather a little dust between the list and sale dates. Despite the fact that inventory remains exceptionally low, we have seen a 2.3 percent increase in the number of new listings. This is particularly telling when we challenge the memory of hundreds of offers and consistently difficult negotiations in the collective rearview mirror. Perhaps the best number to consider when forecasting after this month is the 15.3 percent decrease in ‘sold’ homes year-over-year. These dwellings are selling as our month’s supply of homes reduces this month, but taking ever so slightly more time to do so beyond that of what is seasonally expected.
CAR’s numbers show that although options remain on the decline, buyers are getting used to having fewer seats to choose from. They can see that while demand remains, the time on market is beginning to rise ever so slightly and the music is getting a little longer. As our contestants may be needing to sit a little less frequently and maybe, just maybe, the options are coming back - the dreaded final seat between the two players may never rear its ugly head because really, who liked that part of the game as a child anyway?
If this trend continues, we may just see reduced pressure to find a home and the seller’s side become more balanced with that of the buyers.