Wednesday, August 12, 2015

The Reported Cooling of the Local Real Estate Market Is Not Supported by MLS Data



[Published Aug. 13, 2015, in the Jeffco editions of the Denver Post's YourHub section and in four Jefferson County weekly newspapers]

By JIM SMITH, Realtor

A headline in last Friday’s Denver Post business section got a lot of people thinking that our current “seller’s market” may be fading, but a deeper look at the statistics, at least in Jefferson County, leads to a different conclusion. 


At right is a chart showing how active listings have trended over the past five years in Jefferson County. A graph of total MLS listings would look almost identical, but with bigger numbers.


A true indication of a sellers vs. buyers market is how many days a new listing sits on the market before going under contract.  For this purpose, it is best to consider the median rather than average days on market, because there will always be homes that, for one reason or another, sit on the market for months, bringing up the average days on market.


The 5-year chart at left not only shows that the median days on market in Jeffco is unchanged since February, but also shows how it compares with 2010 through 2014.
 
Breaking these statistics down by postal address, there is some variation around the county. The median days on market for homes with Arvada addresses has dropped from 8 days in January to 5 days in July; homes with Lakewood addresses have dropped from 13 to 5 days on market; Jeffco homes with Littleton addresses dropped from 15 days on market in January to only 5 days on market in July; homes with Golden addresses (which includes a lot of foothills areas) have fallen from 33 to 6 days on market; and homes with Evergreen addresses have dropped from 63 days on market in January to only 9 days on market in July. 

 
Comparing inventory to last summer, every area of Jefferson County has fewer active listings this July than it did last July, which was already a strong seller’s market.  

[At right, not published in the newspaper version of this column, is a chart showing the inventory of active listings in Jefferson County over the past 5 years.]

 
When clients or friends ask me if this seller’s market will end soon, I point to the number of competing offers on listed properties. Obviously, homes which sell in five days or less are doing so with multiple competing offers.  Whether you have 5 or 15 losing bidders on a listing, that means you have many unsatisfied buyers who will be competing for the next active listing. There is not and cannot be enough new inventory to assuage that buying appetite anytime soon. 

 
It also means that prices are going to continue to rise, so buyers don’t have to worry as much that the house they pay “too much” for today will decline in value after closing.

 
If you have any questions about this topic feel free to call or email me. (303-525-1851 or Jim@GoldenRealEstate.com.)

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