For years I have watched as the new listings entering the Denver Real Estate market continued to shrink, much like it did in the late 1980s. You can see this on the chart at my previous post. I finally came across a valuable tool that shows the number of foreclosure filings occurring every week. Well, take a look at this week’s video explanation in less than two minutes
(I need a better lip sync don’t I?)
So this is what I think is happening and is a layover of the late 1980’s and early 1990s. Sellers of Denver Homes have been convinced by the press that there is not a good real estate market and that their house will never sell. They have hunkered down.
The resulting number of homes for sale has shrunk quite a bit but sales have fallen too. The “group think” is that this is a result of all the foreclosures on the market. Sellers have decided not to list their homes for sale, therefore new listings decrease (short sales and foreclosures only account for about 5-8% of the total Denver real estate market). Add to that foreclosures start to drop (some NED are short sales that do sell) and they drop by about 30% over the first 6 months, the buyers start to see fewer and fewer properties to buy. That means supply is down and prices have started to firm. The bottom is behind us.
To take advantage one must be ready to engage when that first home that jumps out at you appears, as there will probably not be another, at the same price. Sellers have a similar problem when pricing their homes to sell here in Denver…they do not know how theirs compares…you need a good, experienced, full time Realtor to assist you in setting the value, and the asking price.