If you have been following the headlines at all, you have probably noticed that the number of home sales is a lot higher than expected for this time of year. This is true at a national level and in the Denver Metro area. We have a couple of charts to illustrate this for you. Our founder, Lon Welsh, also discusses this topic in this video.
Now is the time to sell
This first chart depicts the number of homes that recently sold relative to what you would expect for different time periods of the year. The dark blue line at the top of the chart indicates what is happening this year. From the chart, you can see that the numbers of home sales is way above average. Similarly, Denver is running quite a bit ahead of what we normally would expect at this time of year. The number of homes and condos being sold is way higher than the historical average.
Predicting the market
There are two great metrics to use to help predict where the market is going to go. These two metrics are showing traffic and the number of homes under contract. At the beginning of October, we took a look at the showing traffic in September. It was much higher than expected. This probably means that in 6-8 weeks, the number of people closing on homes will be elevated. It will be far above what we’d normally anticipate.
On October 1st, the number of homes under contract was also elevated from last year. Moreover, it was by a pretty sizable margin. This momentum will likely continue for a while. With that being said, now is the right time to sell. There are a lot of people clamoring for product.
Buying at this time of year
On the other hand, if you are a buyer, things maybe more difficult than normal. This chart shows the number of months in inventory. If the number of months in inventory is 6 or more, the buyers are in charge of the negotiation. If it is 4 months or less, the seller is in charge of negotiation. Currently in Denver, and most of the United States, the number of months in inventory is just a little above one. On that note, if you are at only one month of inventory, the seller is very much in charge of the negotiation. This can be frustrating for buyers.
Should buyers be looking right now?
The answer is yes, you should still look. There is less inventory than you’d normally expect, but the interest rates are so low. This helps make whatever happens in a purchasing a lot more affordable. Alternatively, you could wait until next year. It may give you more to choose from. However, historically, mortgage rates go up about half a point after the presidential election. In the end, you might have more to choose from in the spring, but it will probably cost you more.
If you are interested in buying or selling, contact a Your Castle agent today!