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This may come as a shock to people struggling to sell their homes in the Denver area, as well as Realtors listing homes, but in May, homes on average sold faster in Denver than any place in the nation, according to an analysis of 146 metropolitan areas tracked by Realtor.com.
May marked the second consecutive month that Denver had the boasting rights as the No. 1 metropolitan area for home sales speed in the country, according to Realtor.com, which is owned by the National Association of Realtors.
Steve Holben, who built this home at 3070 S. Jackson St., thinks home bargains abound, but that can change quicker than many think.
The Realtor.com report shows that it took only an average of 39 days to sell a home in the Denver area in May. That is 11.4 percent faster than the 44 days it took in April.
The national average was 92 days on the market in May, 58 percent more days on the market than in Denver. Nationally, the time it took to sell a home rose by 4.5 percent from a year earlier. In Denver, however, the time to sell a home is down 2.5 percent from May 2010.
Metrolist uses different methodology
By contrast, Metrolist last month showed that it took an average to sell 109 days to sell a home in the Denver area.
However, Realtor.com, in its fine-print, said that it is to be expected that their data may differ from days on the market calculated by the local Multiple Listing Service in any given area. That is because Realtor.com calculates the median age of the inventory to come up with its sales rate, and not the average of the total universe of homes on the market.
I proposed to independent broker Gary Bauer that if a Realtor told a home seller that it would take only 39 days sell their home, the seller would ask what the Realtor is smoking.
Bauer’s answer was much more diplomatic.
“If you are listing a home and the owners ask you how long you think it will take to sell it, and you tell them that Realtor.com says it takes 40 days, you are setting up a totally unrealistic expectation,” Bauer said.
Still, it is the trend that is important, not the exact numbers, he said.
“It is very positive we are No. 1,” Bauer said. “I’m from the school as long as they use the same methodology across the markets, that they consistently apply it, it is important for establishing a trend line. That is more important than the actual data points.”
Bauer admits that he doesn’t think the Realtor.com methodology is superior to the way the average days on the market are more commonly tracked.
Low-priced homes are selling in a week
Bauer said that in the Denver area, lower-priced homes in good shape are flying off the shelf, taking only about a week to sell on average. The more expensive the home, the more time it languishes on the market. Bauer said he isn’t sure the Realtor.com methodology addresses that aspect of the market.
“I can’t say I am enthralled by their methodology,” Bauer said. “But it is a valid methodology, if done consistently.”
He also said that the unseasonably low inventory of unsold homes on the Denver market may be influencing the Realtor.com methodology.
Last month, there were 19,573 unsold homes on the market.
“That is the lowest it has been for a May in many, many years,” Bauer said. “We have not seen the typical seasonal increase in inventory so far.”
Also, Bauer included the 1,685 homes categorized as “pending,” a relatively new category by Metrolist, into the active inventory. Excluding the pending homes, the inventory would be even lower, at 17,888.
Market dynamics can turn on a dime
However, custom homebuilder Steve Holben said that he thinks the No. 1 ranking of the Denver area by Realtor.com is a more accurate assessment of the market than much of the other doom and gloom reports in the press.
Steve Holben, who has been involved in Denver real estate for the past 34 years, thinks the Realtor.com report more accurately reflects what is happening in Denver than many other negative housing reports.
“I’ve always felt that Denver’s real estate market is better than the “wisdom from afar” “experts” express,” Holben said. “All real estate is local, and you can’t tell me these people who have never laid eyes on the properties they “value” can be accurate.”
For example, market-rate homes are not facing the overwhelming competition from foreclosures as many believe, he said.
Holben said there are about 178,000 single-family homes and condos in the Denver area. Of those, about 2,500 of them are in some stage of foreclosure.
“That’s less than 1.5 percent,” Holben said. “That seems pretty healthy to me.”
Holben does think buyers can snap up incredible bargains. And the quicker the public takes advantage of low prices, the faster the market is going to change from a buyer’s paradise to one where sellers can demand and achieve higher prices.
“As a builder/broker in business since 1977, I’m seeing prices below replacement cost, and there simply won’t be any new building like what we’ve seen until prices increase,” Holben said. “With Denver’s population growing, there are some predicting a shortage of new inner city homes later this year into next year.
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