Denver Real Estate MLS Market Stats – September 2021

The Denver MLS trends data for September 2021 is out.  The biggest factor I’m looking at is inventory because that’s pure supply and demand—it shows us what’s going on in the market and forecasts the future.  Though inventory increased by 11% from August to September 2021, that’s not enough to significantly move the needle.  It’s still a seller’s market, but it’s going in the right direction.  Looking at Your Castle’s Q3 income trends for multi family properties, we can see that the number of multis solid is up 51% compared to this month last year, and rent growth is steadily increasing as vacancy rates go down.  

Take these stats into account as you form your strategy.  Good deals might be hard to come by, but low interest rates give you the opportunity to get cheap debt and ride the wave of appreciation.

September 2021 Denver Market Stats with Ideas and Observations

Here is the MLS version of the September 2021 market report.  Here are some high points:

• Number of listings
  • Up 11% from last month (great to see)
  • Down 25% from last year
  • Condo inventory got markedly tighter than homes
  • Historically, we should have 15,900 active listings in September; we currently have 3,970.
  • In September 2006 right before the crash, we had 31,450 active listings to chose from!
• Closed units
  • Down 13% from last month
    • A decline would be the normal seasonal trend
    • It’s a little more of a drop than historically we’d expect
  • Down 19% from last year
    • Remember we could not show homes last March / April due to COVID restrictions
    • 2Q and 3Q 2020 were overheated as a result
    • This reduction in sales count from last year is mostly explained by that timing
    • Homes and condos performed about the same
  • Year to date, we’re up a little from last year.  We’re on track to close the most homes ever this year.
• Price
  • Up 1% from last month
  • Up 15% from last year
  • Homes and condos about the same
• Showing traffic
  • Strong showings per active listing in September; a bit above the historical trend
  • Suggests we’ll have a stronger than typical fall
• Under contract
  • Down 6% from last month
  • Down 4% from last year
  • This suggest October volume might be down from October 2020.  But with a strong number of buyer applying for mortgages and showing traffic looking above average, November / December should be good months.
• Days on Market
  • Up a little from last month
    • This is because there was an 11% increase in the number of listings
  • Down from last year
    • Makes sense, since the inventory is off from last year

Lumber Prices Update

Has the softwood lumber bubble burst? On October 1, 2019, lumber was trading for $362 per 1,000 board feet. In 2020 that price rose to $622. With the supply chain problems of COVID, prices spiced in May 2021, topping $1,686. According to Forbes, the high price of lumber added an average of $34,000 to the cost of a new home. The good news is that lumber is now trading at $606, down 64 percent. With housing demand remaining high, don’t be surprised if prices move higher come spring.

Construction costs are near all time highs…. Makes it hard to add new inventory.  This will support prices.

Fed Purchasing to End

$120 billion a month being purchased in mortgage-backed securities and treasuries is scheduled to end by July 2021.

The Fed’s purchased of mortgage bonds helps to keep mortgage rates low.  When they stop purchasing next year, that will provide upward pressure on rates.  That will make homes less affordable and will diminish demand somewhat.

Source: The above executive summary is from Lon Welsh of Your Castle Real Estate.

FHFA Increases Loan Limits

The Federal Housing Finance Agency released their 2022 conforming loan limits, increasing them a whooping 14%, from $548,250 to $625,000.

• 1 unit $625,000
• 2 units $800,250
• 3 units $967,250
• 4 units $1,202,000

These new loan limits go into effect January 1st, 2022. These new loan limits will be followed by new high balance conforming loan limits, which impacts the five major counties in Denver, as well as new FHA loan limits.. so watch for those to be released soon.

Denver Housing Trends September 2021

Showing per active listing trends for Denver

In Denver in September, there were 12 showings per active listing, about the same as July and August.  Traffic continues to be a bit above the hot 2020 market but not by much.  Both 2020 and 2021 are well above the historical expectations of 8 showings per month.

Normally the best time to list a house is in the spring, and the fall is a slower time (so it’s better for buyers).  This season that is true, but the slowdown is less than we’d historically expect.

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Denver and Colorado Springs Real Estate MLS Market Stats – September 2021