RE: Increasing Inventory - True or False?
The recent real estate market fluctuation has certainly caused quite an uproar amongst Denver residents. Is it something to be concerned about? Below is a summary by the incredibly talented Megan Aller, Account Executive (and Stats Queen) with First American Title.
If you have any questions about our real estate market or want clarification on this information, please call me! I'm always happy to help! - Kylie McKay
"Interesting numbers to report for November 2018, increasing inventory is the word on the street and we’ve all been keeping a watchful eye on the numbers to see where the counts will take us. I think it’s important to provide context and use all of the reasonable data points we have available before we talk about a transitioning market. Rather than looking at year-over-year or month-over-month trends I’d like to see how this year compares to the last 6 years, starting back when we first entered this Extreme Seller’s Market. This market is not new to us and percent change values can be misleading. Active inventory is up in Metro Denver year over year by 28.6% in detached single family and up 39.7% for attached residences in the 7 Metro Denver Counties. This is seemingly a very large sway in the numbers. It’s important that we communicate them appropriately to consumers, so they perceive the market the same way the professionals do. Big changes can be scary and easily misconstrued.
For detached single family units we had an alignment which created a line up of the shortest November in this cycle (2017) against the second highest November reported this year making the inventory percent change seem much higher. When we compare 2018 to the other November’s in this cycle, we only had approximately 100 extra units than the average active count for this month.
Let’s also not forget that we had record low inventory through the first half of the year as buyers gobbled up homes at record levels due to rising interest rates. Since we had higher than usual market activity early this year we are likely experiencing a hang over of sorts in the last half of the year.
Attached single family is a different story. With the resolution of builder defect laws roughly 18 months ago new construction condo and townhome units are now completed and finding their way to market. Buyers have new choices in the market that they did not have for the first 6 years in this cycle and the market is showing signs of easing in the last 3 months with increased inventory.
Before we become concerned with the amount of inventory in our market, please remember that based on the demand in Denver we are still far from the amount of inventory we would need to create a 6-month supply of homes which dictates equilibrium."
- From Megan Aller, Account Executive with First American Title
Again, if you have any questions, please call me!