Buyers face a 1.7-month supply of homes

There is less than a two-month supply of unsold single-family homes in the Denver-area market, according to a report released today.

This 3-bedroom, 2-bathroom home at 1240 Pennsylvania St. is priced a $349,500, close to the average price of a home sold last month.

“Even though there were 2,505 more homes available in June than in March, buyer demand is still strong,” said Bauer, who based his report on Metrolist data.

The Denver-area home market had the fewest unsold on the markets since records have been tracked by Metrolist last March. The lower the price of a home, the lower the available months of inventory.

There was only a month’s worth of unsold homes priced just below $100,000, for example. It doesn’t get much better for homes pried below $300,000. For homes priced from $100,000 to $199,999, there was only a 1.15-month supply of homes and from $200,000 to $299,99, there was only a 1.10-month supply.

While some media outlets focused last week on the 1.7 percent drop in total closings in June from May — even though it was otherwise a record June by a number of metrics — all the drop in month-to-month sales occurred for homes priced below $400,000, according to Bauer’s analysis.

The biggest percentage drop occurred for homes priced at $99,000 or below.

Single-family homes in that price range showed a 19.2 percent drop from May. Condos in that price range showed a 21.08 percent month-to-month drop. Overall, there is only a 1.44-month of condos on the market.

“We had 59 sales from $0 to $99,999 and I think we had 59 new listings added to the active inventory in that price range last month,” Bauer said. “The other thing is that more consumers also are buying new homes. New home builders are building homes as fast as they can to keep up with consumer demand, even though they are facing challenges such as a shortage of labor, materials and finished lots.”

At the other end of the scale, there is a 17-month supply of resale homes priced at $2 million or more. However, those luxury homes also showed the biggest month-to-month percentage gain, with closings rising by 44.4 percent.

“It continued all through the recession,” he said. “The American Dream is still to own a home. It’s a lifestyle choice.”

Many consumers would rather own a home than rent, he said.

It also is becoming increasingly more expensive to be a renter, he said.

“Short-term, the impact has been minimal, but long-term, if rates continue to rise, it will have a big impact,” Bauer said.

“If rates go up another point, that will be a 2-point or 2.5-point increase from the lows,” Bauer said. “If that happens, I think we will see the market slow.”

Meanwhile, records for June set last month include:

• Average price of a residential (single-family) home – $349,339.
• Residential average sold price (year to date) – $328,427.
• Single-family (all homes) – $318,541.
• Single-family average sold price (YTD) – $301,151.
• Residential median price – $290,000.
• Residential median price (YTD) – $275,000.
• Single-family homes under contract – 7,420.