The market continues its trend as low inventory supports the listing prices in Denver, the Denver metro areas, and nationally.
Inventory decreased in the Denver metro area 13% from October 2020. The average number of home closings decreased 18% from a year ago. The average days on the market decreased a whopping 50% from a year, signaling a national trend as well.
With increased competition on corporate cash purchases, low interest rates, and online competition to tour from abroad, the national number of days on the market decreased to less than 2 weeks -- the shortest ever since 1989, when National Association of Realtors first started to collect the data.
With the seasonally slower market, buyers have a much shorter amount of time to find a home and make an offer. At the end of the third quarter, the hottest markets to buy were Indianapolis, Denver; Grand Rapids, Michigan; and Seattle and Tacoma, Washington.
A record high 36% of single family homes purchased nationally were made by investors. Meanwhile, in Denver third quarter sales of single family homes by investors constituted 16.8% of the sales. This represents a 76% change year over year. Increasing home prices have driven many buyers into the rental market. In the Denver metro market, rent increased 9% over the year (https://www.redfin.com/news/investor-home-purchases-q3-2021/).
According to Andrew Abrams, chair of the DMAR Market Trends Committee, “Earlier in the year, expectations from sellers were that their homes would sell for substantially above asking price… While properties are still closing above asking at 101.82 percent of the list price, realities have caught up with expectations. Buyers can be grateful that the extreme bidding wars are less common, and those without 20 percent to put down have a fair shot at a house and the continued low interest rates can keep monthly payments down.” This has brought spring home buyers out to the market, or buyers who wished they had purchased a year before. According to November data, Redfin reports home demand is at an all time high since the data was gathered in 2017.