Listings rose 3.7% in September from August.
DREW research shows listings fell every Aug.-Sept. from 2008-2015.
Increase in listings provides opportunity for buyers locking in low mortgage rates.
At first blush, a 3.71 percent increase in the number of actively listed homes in the Denver area, may not seem like a reason to break out the Champagne.
However, the increase in the number of active listings in September from August appears to be unprecedented.
“I don’t think it has ever happened before,” said independent Realtor Gary Bauer.
Late last week, the Denver Metro Association of Realtors released its September housing report.
It showed that there were 7,599 active listings on the market in September, a 3.71 percent increase from the 7,327 in August.
Denver Real Estate Watch dug deeper into the DMAR data and found every September from 2008-2015, the number of active listings dropped from August.
Indeed, the average month-to-month drop from 2008-2016 was 2.7 percent. In other words, the 3.7 percent gain was a 6.4 percent shift.
In 2014, there was a 6.9 percent drop in the number of active listings in September from August.
“The increase was somewhat surprising,” Bauer said. “I was expecting the usual cyclical decline.”
For seasonal reasons, the number of active listings typically dips in August from September.
Many people take their homes off the market if they have not sold them by the time the trees start to change color and the air get crisper.
Others decide to wait until the spring before listing to take advantage of the seasonal pick-up, as more buyers hit the market.
This year, prospective home buyers have more homes to choose from than in four years.
There were more homes on the market last month than any September since 2012, when there were 10,348 homes on the market.
Still, from 2008-2016, there were an average of 13,962 homes on the market each September.
In other words, the number of listings last month was still 45.6 percent below the average number of listings during that time period.
However, from about 2008 to mid-2012, many of the homes on the market were distressed properties that were either foreclosures or short sales.
With home prices still hovering near records, distressed properties no longer are a factor in the Denver area.
With many observers expecting the Federal Reserve to raise its rates in December, mortgage rates very well could be higher next spring. T
Low rates may convince more people to put their homes on the market and more buyers to buy them, said Anthony Rael, chairman of DMAR’s Market Trends Committee. If the Fed, as expected, raises its short term rates in December, longer-term mortgage rates may also rise, although that is not guaranteed, as so many other factors also influnece the direction of mortgage rates. Indeed, the last time the Fed raised its rates, mortgage rates fell about 60 basis points.
However, while the Fed’s rate does not directly influence mortgage rates, it can influence them.
Meanwhile, rates, while up slightly, are still near historic lows, Rael noted.
“We at DMAR are really not in the prediction business, but we kind of went out on the limb to predict this fall could be the very best one in at least 10 years,” Rael said.
The added supply of homes on the market is especially welcome news, he said.
If demand remains constant, more homes on the market should lead to lower prices, he noted.
Also, while there is still the occasional bidding war, they are not as common this time of the year, as they were during the spring and summer, he said.
“I hate to sound like one of those brokers who always says, ‘Now is a good time to buy,’ whether it is or is not,” Rael said.
But with an increase in active listings and other dynamics in the market, such as still low interest rates and uncertainty surrounding the Presidential election, he firmly believes now is a good time to buy.
“I don’t know if it is worth breaking out the bubbly, but I do think the increase in active listings gives home buyers an opportunity to take advantage of market conditions,” Rael said.
Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.