Defining "inventory" as all listings that have not yet sold (i.e., closed), I have calculated at the end of each month the percentage of inventory that is under contract. Most analysts define inventory has just the "active" listings and describe that inventory as plummeting. However, a thousand or more homes are entered on the MLS each month (1,082 this February vs. 1,047 last February; 1,187 this January vs. 1,197 last January), and it's just that those listings are being put under contract quicker nowadays, resulting in far fewer homes for sale. The cycle feeds itself, with buyers snapping up listings in competition with each other.
First, let's look at the figures by MLS area, city and county over the last 13 months. The percentage of inventory under contract was higher at the end of February 2013 than at the end of any other month in any area for the last 13 months except for one month in one area (shown in red)! Now, that's an amazing trend! This chart and the one below are attached as PDFs if you want to print them out or share them, which you're welcome to do with attribution. The calculations were done by me from Metrolist data which includes the other two Front Range MLS's (IRES and PPAR).
Now, look at the chart below, showing that this increased buyer activity has spanned all price ranges, both across the MLS and in Denver and Jefferson Counties:
If you have any questions about these charts and how to interpret them, feel free to call me at 303-525-1851.