D
enver, once notorious for its tight housing market, is now a leader in building up unsold inventory nationwide. According to Realtor.com, the number of homes for sale across the US jumped 28.5% in March compared to the same month last year, with all 50 largest metro areas experiencing an increase.
San Jose, Las Vegas, and Denver saw particularly significant gains, with increases of over 67%, more than twice the national average. These cities are among the 18 metros where inventory levels now exceed pre-pandemic levels. Realtor.com's chief economist, Danielle Hale, notes that nationwide, unsold home inventory is about a fifth lower than it was between 2017 and 2019.
In Denver, local agents attribute the rising supply to a sluggish resale market in condos and townhomes, elevated mortgage rates, economic uncertainty, and more owners seeking to cash out. However, they also point out that the current inventory remains short of historical averages. Metro Denver's inventory was at 9,764 in March, below its four-decade average for the month.
Condo and townhome listings are increasing faster than detached homes, with a 87.2% increase year-over-year. Despite this added supply and lower prices, buyers aren't jumping into action. Keri Duffy, a Realtor with Kentwood Real Estate, notes that entry-level condo buyers are driving up the inventory, as they struggle with rising homeowners association fees.
HOA fees have become a significant expense for condo owners, often exceeding mortgage payments and property taxes. This has led some buyers to opt for newer detached homes instead of older condos. Rising HOA fees can also trigger downward spirals in communities, making them "unwarrantable" and limiting financing options.
About 24% of Denver home sellers had to cut their listing price in March, with condo sellers facing even higher rates of price cuts. Mike Bruce, president of the Denver Metro Association of Realtors' board of directors, attributes rising inventory to pent-up seller demand, as new listings outpace sales.
To stand out in a crowded market, homes need to be well-staged and priced correctly. Agents report that homes in prime locations can still move quickly, even with higher inventory levels. However, listings are taking longer to sell, with the average days on market increasing from 39 to 48 days.
Some sellers are choosing to move out of state or retire due to rising living costs and strong price appreciation. This trend could be contributing to the rising inventory in Denver, as population counts show a small increase in people moving to Colorado from other states.
