This month’s market commentary is eerily similar to the prior month’s commentary, but also so true. It’s more of the same: there are just not enough houses for sale.
Repeat from last month!
That’s right – it’s more of the same. Too few homes on the market. Recall last month’s numbers: From November 2020 to November 2021, inventory was down 34.2%. December was even worse. From December 2020 to December 2021, there was even less – 41.2% less inventory. This is a Denver housing shortage. Just in the last month, from November to December there was 34.3% less inventory – wow! More homes will pop up soon, but be ready for them to be swallowed up quickly. The average days it takes to go under contract is a mere 19 days. It’s very, very tight!
Sellers’ alternatives in a strained market
Why aren’t people wanting to place their home on the market when they can make out like a bandit? The absolute largest consideration for homeowners: If they need to find a home, they’re literally scared they won’t find a replacement home given the lack of homes.
This has led to selling pursuing alternative strategies instead listing and finding a new home with a single move. Sellers are considering moving into temporary housing – family, rentals, AIRBNB’s – in order to wait for the right property to pop up. This may take a considerable amount of time depending on their needs.
With interest rates now slowly, but steadily rising, properties will become less affordable. Sellers won’t want to delay if they can avoid it. With the tough market, many homeowners have decided to keep not to list and just stay put. Potential sellers will either remodel their existing home, finish their basement, add on, or pop the top. This is a downward spiral into lower and lower inventories. Sellers just don’t want to take their chances.
What will break the cycle of not enough houses
Nobody knows for sure. If interest rates get too high buyers will lost their ability to afford the prices out there. This could squash demand and potential buyers will rent instead of buying. This may finally break the hold on the housing squeeze. Still, we need more – a LOT more Sellers!
Never fear, your CJV Real Estate Agent is here to help! It’s not impossible. You just need a Market Expert to help. We can help you make the right decision for you and your family!