Wednesday, March 20, 2013

Home sales inventory in metro Denver fell 28 percent during February to a new low

According to Department of Numbers, the home sales inventory in the Denver area fell year over year in February for the 24th month in a row. The total single-family and condo inventory dropped to 9,959 during February, down 28.5 percent from February 2012's total of 13,945. February 2013's inventory total was the smallest total recorded since Department of Numbers began collecting inventory data in 2006. 

The first graph shows the total inventory for each month since April 2006. (Dept of Numbers data only goes back to 2006.) 

The second graph shows that year-over-year declines have been the norm since early 2011. In addition, the magnitude of the declines appear to have peaked during early 2012, and have lessened somewhat in recent months. Nevertheless, continued declines in the inventory are substantial. 

While the Dept. of Numbers data isn't the most detailed in the world, it does offer additional corroboration to numerous claims by Realtor organizations that inventory is collapsing. This appears to be true for now. 

The reasons behind the declining inventory can be varied. One factor that Realtors report is the fact that many homeowners who would like to sell their homes cannot qualify for a new mortgage so must stay put. This keeps many homes off the market. Also, as the Corelogic report in underwater mortgages recently showed, 17 percent of homes with mortgages in Colorado are still underwater, and that discourages home sales as well. 

Meanwhile, as you'd expect in a time of declining inventory, the median asking price has headed upward, and has increased year over year for the past 19 months in a row.  During February, the asking price was up 8.3 percent year over year, increasing from $277,000 to $300,000.