At the end of every month I run a count of active and under contract homes on Metrolist, the Denver MLS which also displays listings from the other two MLS’s serving Colorado’s Front Range. I post my findings on my blog (see previous posting), but this week they deserve mention in my column, too.
The trend since I started doing these reports last October has been steadily up, depleting available listings faster than would-be sellers can replenish them.
Back in October, 23.9% of all unsold listings on the three MLS’s were under contract. The remaining 76.1% were available. Today, 44.1% of unsold listings are under contract, leaving only 55.9% available to purchase. In other words, the single biggest contributor to the shrinking inventory is that buyers are snapping up listings faster than new ones can be added.
Everyone in our little office is busier than they’ve ever been. We have far more buyers and sellers under contract than we have active listings. It’s common to have other buyers competing with our buyers for listings. Just last week, I submitted a full price offer for a client on a home, and even had an additional provision that she would exceed any competing offer by $1,000. We lost to another buyer who offered a cash closing in 6 days at $5,000 over asking price. That’s the kind of market we’re experiencing now.
The supply vs. demand ratio is so unbalanced right now, that homes are selling for more than they might appraise for based on last year’s sales. This is not necessarily a problem, since appraisers do give some weight to the offer itself when determining value.