Happy New Year! I hope 2020 is off to a great start for you and your loved ones. The real estate market, as always, is changing!
Inventory is scarce. There just aren’t many homes for sale. In fact, we finished 2019 with almost 10% fewer homes to choose from than we had at the beginning of 2019. This low inventory isn’t because homes aren’t selling; it’s because almost 30% fewer new listings came on the market during December compared to November.
It would only take 1.13 months to sell all the single-family homes in the Denver area that are for sale now. (We call this “months of inventory.”) This means it’s a very good market for sellers. In fact, anytime we have four months or less of inventory, sellers have more negotiating power than buyers. So, as we begin the year, sellers have more control in negotiations than buyers.
It may seem strange to say that homes are taking longer to sell since it’s a seller’s market, but there has been an increase in the average number of days it takes to sell a home. For three years, homes were taking about 26 days to sell. This past year, this jumped to 31 days. Homes that sold in December spent an average of 41 days on the market.
Sellers are beginning to understand that the days of multiple offers within a few days of listing a home are over for now. Yes, home prices are up, but buyers are looking for the ideal home. It’s become very expensive to buy a home. In fact, recent studies show that average wages won’t purchase an average home in the Metro area, so buyers are being extremely discerning and careful about what they buy.
As usual, we expect to see inventory and sales increase in the next few months. Forty percent of home sales in the U.S. occur between May and August. Low mortgage rates will drive home buying in the coming months.