DENVER — It's no secret by now that Denver's housing market is hot, but also tough on those trying to buy a home.
“You know, I’ve hosted open houses – if we’re gonna judge it by what’s happened in the past, hundreds of people can come in and you can get 13, 14, 15 offers. $100,000 above asking is what I’ve seen," said Leigh Weilert, a Broker Associate in Denver with Coldwell Banker Realty.
Standing in one of the two homes she's working to sell, this one in Lakewood, she acknowledges that listings are few and far between.
“We are finding a shortage of homes and people are still drawn to the market. Also rent is getting very high. so people are wanting to put their money into investments and into equity," she said. “It is a bit stressful because as a buyer you feel a little bit of pressure to get going, but I would say just to breathe, and to continue to put one foot in front of the other."
She said the shortage of homes checks out with the most recent housing report from the Denver Metro Association of Realtors (DMAR).
According to the most recent housing report from DMAR, there were 1,184 active listings at month's end for January of this year. It's a number that dipped by nearly 50% from January 2021, when the number was at 2,316.
"It's hard to predict exactly why we're seeing those levels, because I think over the course of the year it generally balances out," said Andrew Abrams, who chairs the Market Trends Committee at DMAR. "But really, with the start of this year starting so low, I would expect less homes to be purchased throughout the year."
The supply of homes on the market is called a "historic low" in the abstract of the report, which Abrams said would lead to a "skyrocket" in prices over at least the next three months.
However, both the median and average closing prices on homes dropped slightly last month.
Abrams said the data there is usually on a 90-day delay.
"So we'll kind of see that closed data, the average price increase, be somewhat delayed for what's happening today. But the reason for that is, I think when there's an expectation that interest rates will increase, there's that acceleration period of buyers wanting to get in before it goes up," he said.
Because development takes time, he said that slows the time for the market to stabilize, but said more housing units could help slow the increase in prices.
"Obviously even the process of development takes an incredibly long time. Changing potential policy issues to add more density won't fix things overnight, because then again, we need to build to get that. So I think it's going to take a long time to get to the National Association of Realtors consider a neutral market, which is four to six months of inventory when we're below one month of inventory today," he said.
Overall, he said to be prepared when buying a home right now.
"So if you're a buyer, doing your due diligence and really understanding what it takes before you ever step foot into the house is so important. Look at some houses that have recently sold. Look at the list price and then what it actually closed at to understand how much above asking is normal in that area. Knowing what an as-is offer looks like and feeling comfortable with that. Any appraisal gap you can give. So when you walk into that house, you're ready to make a decision by the time you walk out the door," he said.
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