Buyers in the Denver-area rummaged through a dwindling inventory of unsold homes, pulled out their check books and drove the number of contracts written last month up by 14.5 percent from August 2011, according to a report released today.
The report, an analysis of Metrolist data by independent broker Gary Bauer, showed that 5,196 homes were placed under contract in August compared with 4,537 in August 2011. Metrolist tracks home sales by Realtors in the Denver area and publishes MLS statistics.
The number of closings, which reflects sales activity in earlier months, was even stronger than the contracts signed.
There were 4,685 closings last month, a 17.9 percent increase from the 3,973 in August of last year.
“(It was) a great month and the future looks promising,” Bauer said. “The prime home selling/home buying season is over and the fall season is upon us.”
He said the August statistics reflect continuing buyer demand, as the inventory continues to fall.
In August, there were only 10,826 homes on the market, 34.9 percent fewer than the 16,631 fewer buyers could choose from in August 2011. The inventory in August was statistically unchanged from July, when one more home was on the market.
The Denver-area housing market is positioned to continue to improve, according to Kirby Slunaker, president and CEO of Metrolist.
“Everything we’re seeing points to a steady recovery in the Denver housing market,” Slunaker said. ”The combination of limited supply and strong demand indicates a durable recovery is underway.”
The statistics reflect what Anthony Rael sees on the street.
“When I am showing someone what is out there in the marketplace, there is just not much inventory to look at,” said Rael, a broker with RE/MAX Alliance.
“Really, the good ones, if they are priced right, they are just gone,” Rael added. “In those cases, they are just gone. You will see multiple offers, especially if in the $265,000 or below market.”
In the spring, he was listing a small home in Arvada in the $150,000 to $155,000 range and there were so many brokers lining up to see it, the listing caused a traffic jam.
“It was definitely a fixer-upper,” Rael recalled. “We probably had 50 showings within 24 hours. Agents were calling me and were standing in line to look at it. There were so many cars parked up and down the block, it caused gridlock.”
Rael said he ended up getting seven or eight offers for the home, six of them for cash.
“It sold for $3,000 or $5,000 above the asking price,” he said. “Honestly, if offers came in any higher, the home would have had trouble appraising.”
More recently, he had a similar experience with a home in Thornton listed at $265,000.
“People were beating the door down,” Rael said. “I think we got a total of six offers. It’s now under contract at the full price. We had a couple above the list price, but they were seeking seller concessions.”
He said he expects the buyer fervor to continue through the fall.
“Honestly, I don’t see anything that would slow it down,” Rael said. “I just wish more people who have been afraid or unable to sell their homes, would put them on the market.”
Peter Niederman, CEO of Kentwood Real Estate, could find no fault with any of the year-over-year numbers, other than the declining inventory. On a month-to-month basis, he noted that the market was fairly flat.
However, for seasonal reasons there often is a drop in activity in August from July.
“I think everything is hitting on all cylinders on a year-over-year basis, except for that one metric – the declining inventory,” Niederman said. “Overall, I would say it was nothing short of spectacular!”
He did say that he thinks there could be a “shadow market” of bank properties that could eventually drive up the inventory.
“If there is a shadow market out there, and I believe there could be, I think we will be able to do a good job of absorbing that inventory,” Niederman said. “We could use more inventory.
Meanwhile, the average price of a single-family home that sold in August rose to $311,893, almost 10 percent higher than the $284,065 in August 2011.
The median price of a home sold in August was up about 11.6 percent, rising to $262,000 in August from $235,000 a year earlier.
The median price of a condo did even better, rising 14.6 percent to $148,950 from $130,000. The average price of a condo was up about 9 percent to $183,359 from $168,050 in August 2011.
“The increases are solely due to the mix of homes being sold,” Bauer said.
Indeed, on Wednesday Kentwood reported that the number of closed sales of homes priced at $1 million or more in August rose by almost 61 percent from August 2011.
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