The conventional wisdom is that home sellers should stay on the sidelines starting in September and wait for the spring. After all, the prime selling season kicks off in Denver and across the country about the time you see the first robin of the season.
However, with mortgage rates hovering below 4% and a near record-low inventory of unsold homes available in the Denver area, this fall could be a great season to sell your home.
First, if you look at what happened last year, a case could be made for waiting. In September of 2014, home sales fell by 10.75% from August. The month-over-month trend accelerated for the rest of autumn last year. In October, single-family home sales in Denver fell by 11.6% from September. And by the time November hit, sales fell a whopping 23.5% from the previous month. There was nothing alarming about the falling sales; they indicated nothing more than a typical seasonal dip.
TRELORA Dug Deeper into the Data, We Found that Denver was a Strong Seller's Market Last Fall, Despite the Seasonal Month-to-Month Drop in Sales.
Consider this metric: In September 2014, there was a 7.8-week supply of unsold single-family homes on the market in the Denver area. That means if the demand for houses stayed constant and no new homes were added to the market, in less than two months there would be no more homes to buy in Denver.
With less than a two-month supply, it was clearly a strong seller’s market last fall. A market with 5 to 7 months of inventory is one that is in balance between buyers and sellers.
In October and November of 2014, the market actually became slightly tighter than in September, with a 7.6-week and a 7.4-week supply of unsold single-family homes available, respectively. The months of inventory of homes remained so low because few homes were being listed and buyer demand remained robust, if not as frenzied as it had been in the spring and summer.
And Let’s Put That into Context:
In June of this Year, there was a mere 5.5-week Supply of Unsold Single-Family Homes in the Denver Market, the Lowest it has Ever Been.
By the end of August, the inventory level had climbed to 7.9 weeks. In other words, in August, when the market was experiencing its typical seasonal slowing, the available supply of homes had grown by fewer than three weeks from the tightest month in Denver’s history! And it’s not like the market stood still after the record-breaking June. From June to August, the number of single-family homes and condos sold in the Denver area rose by 45.7%.
Meanwhile, Mortgage Rates, at about 3.9%, are Actually Slightly Lower Today than they were in June.
No one knows where interest rates will be in the spring, although with Federal Reserve Board Chairwoman Janet Yellen saying she expects the Fed to raise rates this year, the smart money is that mortgage rates will be higher next spring.
Home buyers wanting to lock-in rates before they rise means more buyers will be house hunting this fall than you would normally expect when the days are shorter and darker. Also, consumers who lost bidding wars in the spring and summer know they have a better shot at buying a home in the coming months than they did when sellers were fielding 15 or 20 offers.
Low interest rates, an inventory of homes so low it can be measured in weeks instead of months, and pent-up demand from buyers, means this is a good time to list your home, no matter the season.