Market Strong, Inventory Shortage - Sept 2016

Real Estate

As kids headed back to school in August, the Denver real estate market held steady, meaning the strong sellers’ market showed few signs of retreating. While detached single family (DSF) home prices declined over the previous month, they rose nearly 9 percent from the previous year. Attached single family (ASF) home prices increased around 1 percent from the previous month and 13 percent compared to a year ago. Other key statistics for the month include:

  • Inventory shortages persisted with the total number of available units for sale down nearly 4 percent from the previous month;
  • Monthly supply of inventory for both DSF and ASF declined from the previous month;
  • The average days on market increased both from the previous month and from a year ago due to cancelled contracts; and
  • The market slowed a bit, as it typically does through the end of the year, with the number of homes selling in seven days or less dropping below 50 percent.
  • Contract activity decreasing on average by 25 percent from the third to the fourth quarter;
  • Closings slowing down 19 percent on average from the fourth to the first quarter; and
  • Average sold prices tapering, while average days on market and the ratio of buyers to sellers increasing, in the winter months.

As we enter the final few weeks before the election, many ask if the presidential election will have an impact on our real estate market. Based on data from the past 10 years, the elections in 2008 and 2012 had little to no impact on the market outside the overall market cycle (remember the 2008 subprime mortgage crisis?) and seasonal trends, which include:

  • Contract activity decreasing on average by 25 percent from the third to the fourth quarter;
  • Closings slowing down 19 percent on average from the fourth to the first quarter; and
  • Average sold prices tapering, while average days on market and the ratio of buyers to sellers increasing, in the winter months.

Sep16MarketAnalysis