Wednesday, February 5, 2014

You Thought Housing Inventory Was Tight Before, But Look at This!

[Published Feb. 6, 2014, in the Jeffco editions of the Denver Post's YourHub section. An abbreviated version also appeared in five Jefferson County weekly newspapers.]

In the description of this week’s featured listing, I mention that 8 of the 10 most recent sales in that subdivision took place within five days of going on the MLS.  And the other two listings sold in less than a month.

That inspired me to log into Metrolist, our local MLS, and see how representative those numbers are of the total Jeffco market.  I discovered that they are, in fact, a reflection of how hot the real estate market remains throughout Jefferson County and perhaps beyond, even as we enter our snowiest, coldest month of the year.  Here are some of the statistics on the different parts of the county.

In my home town of Golden, there are currently six active listings, but four times as many are under contract — and half of them went under contract in 6 days or less.  Not so long ago, there were consistently 20 to 25 active listings in the City of Golden.  That number has been steadily declining.  Six active listings is almost unfathomable to us long-time Golden Realtors.

Among homes with Lakewood addresses, 188 are active, but 242 are under contract, 70 of them in a week or less.

Among homes with Arvada addresses, 193 are active, but 259 are under contract, 72 of them going under contract in a week or less.

Among homes in Wheat Ridge, 46 are active, but 48 are under contract, 11 of them in a week or less.

Among homes with Littleton addresses, there are 278 active listings, but 315 are under contract, 100 of them in a week or less.

The one area of Jeffco where this pattern breaks down is the foothills, where homes are still taking a long time to sell, and active listings far outnumber those under contract.

Among homes with Evergreen addresses, for example, there are 68 homes under contract, 14 of which went under contract in 6 days or less, but there are 162 active listings — the complete inverse of the ratio in the non-foothill areas of Jefferson County.

The sharp drop in inventory can be attributed in part to the floods we experienced last summer and fall. People whose homes were destroyed needed to find someplace to live, whether or not they were rebuilding. This put an additional demand on both the rental inventory and the inventory of homes for sale.

Frequently we receive inquiries from out of state buyers wanting to rent for a year while they get the lay of the land and decide where to buy. In more normal times, this would be a reasonable approach to relocation.  Now, however, they quickly discover that the supply of rental properties is quite small, and they have to change their strategy.  What I usually suggest is that they move into an “extended stay” hotel for a month or two and get that “lay of the land” more quickly so they can buy rather than rent.  The cost of those hotels is quite high, but so are the rents — if you can find a house to rent — and although the selection of homes for sale is quite limited, they will have to compromise their needs and wants far less than in a rental, where they’d be stuck with a lengthy lease.

I have arranged with one “extended stay” hotel a reduced rate of under $100 per night for buyers who work with me or one of my agents.

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