The unseasonably warm weather and lack of snow in October kept the reds and yellows of fall around a little longer for us to enjoy this year. And while the temperature didn't drop much, the amount of active listings in the Denver real estate market did. October saw 15% less active listings at month's end than September, and 30% less than this same time last year. This deficit isn't necessarily due to a lack of new listings, however. Sellers submitted 5,314 new listings to the market in October, but buyers put 5,790 listings under contract, leaving us with less than three weeks of active inventory heading into November.
Supply Issues
If no new homes came to market in the next three weeks, we would completely run out of available housing stock. For perspective, a market in balance would have 6 full months of inventory. We would need roughly 35,000 active units for that to happen and at least 20,000 before we would feel a significant shift in favor of the buyer. At the end of October, the active listing count was just 3,376.
Steadfast Demand
Showing activity and contracts are still going strong well into the fall months as opposed to the slight tapering we would typically expect, and the odds of selling (the odds of going under contract or closing within 30days) sits at a staggering 83%. The highest this number has ever been recorded is 89%, which means it's still a great time to be a seller! But it's also a great time to be a buyer, which is why demand remains so high. Today's buyer has a unique opportunity to purchase a home with a more favorable amortization schedule. Low interest rates are creating incentive, while rising rental rates are creating urgency. Rents are up 20% in Denver for a new lease and 8% for renewals. There's never been a better time to enter the Denver housing market and start building equity.
Home Strategy Heading Into the Holidays
Thanksgiving weekend is actually a great time to be a home shopper. That's right, if you can pull yourself away from the stuffing and mashed potatoes, you might just secure your new home without a fight. Other buyers take their foot off the gas during the week of Thanksgiving, giving you more opportunity and less competition. As for anyone who's thinking of selling, while you may be hesitant to list in December, there are a few reasons to reconsider. Did we mention that inventory is 30% lower than last year and that buyers are hungrier than ever before? Also, buyers who are shopping during the holidays tend to be more serious about making it to the closing table. Job transitions and relocations during this time of year create an urgency that we don't see in the summer months.
What the End of the Zillow ibuyer Program Means for the Denver Real Estate Market
In short, it won't have much impact here in Denver. If you haven't seen the headlines, Zillow is pulling the plug on its ibuyer program, called œZillow Offers. This announcement caused speculation that the housing market was crashing or could crash because of it. The truth is, they had a very small market share here in Denver, less than 2%. Because real estate is so nuanced, especially here in Denver with our unique and diverse home styles, the algorithms couldn't quite get it right and the program simply proved to be less profitable than the company had hoped.
With opportunities on both sides of the real estate transaction, this is a great time to be a buyer or a seller inDenver. Check back next month to see if November follows seasonal trends or if we see an unexpected bump in activity.
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