It’s the old supply-and-demand predicament: Home sales in the U.S. continue at a torrid pace, but the availability of listings remains limited. Buoyed by historically low mortgage rates, buyers keep shopping for homes, reducing the available inventory and sparking a rise in home prices across the country.
News website The Atlantic summarized the sizzling home market this way:
“Pick a housing statistic at random, and it’s probably setting an all-time record. Home prices: record high. Inventory: record low. Percentage of homes selling above asking price: record high. Average time on market: record low.”¹
Looking at our inventory in the Washington Park East Neighborhood over the past 5 years, we see this trend of fewer homes available and homes selling for record prices:
In July 2016 we had 53 home listings compared to July 2021 when we had only 22 home listings available. Using that same timeframe, we saw homes in our neighborhood selling at 99.4% of the list price compared to the homes of July 2021 selling at 101.3% of the list price.
While the news may be reporting a cooling of the market, homebuyers are still going in strong with their offers, we are just not seeing the bidding wars of the spring season. We are also moving into what has been a typical cycle of Denver real estate for the past 10 years; a ramping up in February with a slow down in August, this year it seems to have hit a bit quicker based on buyer burnout and lifted travel restrictions, however.
“Demand for bigger and more expensive accommodations amid the CoViD-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom. The inventory of previously owned homes is near record lows,” according to Reuters.2
What does it mean for you?
If you’re thinking of selling your home, now may be the right time to do it. Across the country, it’s a seller’s market, meaning demand is outpacing supply. That supply-and-demand imbalance puts sellers in a great position to sell their homes at a premium price.
It’s impossible to predict with certainty when mortgage rates will rise or fall. So, when mortgage rates are at or near historic lows (as they are today), you should consider taking advantage of those rates to borrow money for a home purchase, take equity from your home to buy an investment property, or refinance your existing mortgage.
The real estate market is still strong and owning a home in a desirable neighborhood like Washington Park East is a good investment.