A History of Housing Inventory in the Denver Area: Where Has it Gone?
There has been a lot of talk recently about the low inventory in the Denver area, but how low is low? Let’s walk through the past 10 years of inventory levels to see just how low inventory is these days.
In January of 2007, Denver had 41 months worth of inventory. In January, in the dead of winter when real estate is historically slow. This inventory rapidly dropped as we entered into the recession and the housing crisis, dropping from 33 months in June 2007 to just 5 months in July 2017. Where did all the inventory go?
As many of you remember, 2007 was the very beginning of the housing crisis, or the burst of the housing bubble, in the United States. 2006 brought us ample inventory in short sales and foreclosures, but by mid 2007 housing prices had diminished putting many homeowners underwater — meaning they owed more than their home was worth. Selling was no longer an option unless absolutely necessary, so the inventory stopped coming into the market. To make matters worse, builders stopped building new homes, further depleting inventory.
Not much changed in regards to inventory until early 2010 when hints of recovery started to peek through. From July 2009 to January 2010 months of inventory climbed from 5 to 15. These inventory numbers held for the next couple of years, dropping again in 2013 and further declining from there to where we are now. In March 2017 there was just 1 month of inventory left.
The question is, where has all the inventory gone? Experts say many potential sellers are staying put in fear of finding a new home within their budget in this ‘crazy market’ or not wanting to let go of the incredibly low mortgage rates from years past. With rising home prices a family can sell their current home and walk out with cash in hand to roll into a new bigger home… if they can find one.
Denver area inventory hasn’t been above 4 months since January of 2014. Potential buyers continue to rent due to lack of available homes. If you’ve been thinking of selling, homes are still flying off the market and now is the time. Take advantage of the high prices while they’re still here. Reach out to today to discuss a solid strategy for your home sale.
Sources:
https://en.wikipedia.org/wiki/United_States_housing_bubble
http://www.freddiemac.com/finance/pdf/201704-Outlook-04%2018%2017.pdf