Inventory: Shortage or Back to Normal? [Analyze This]

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by Osman Parvez
Oh my, how the tables have turned.   

Real estate buyers in Boulder are irritated at the lack of selection, particularly at the entry level of the market.   Meanwhile, our sellers are quite pleased at our ability to hold the line on price and negotiate aggressively.

Is it just low inventory levels or have sales picked up markedly?  

We'll delve into this topic in-depth in the next client edition Silver Fern Report (sign up HERE).     For now, how about a teaser?   Take a look at the following chart.

Inventory is at or below "normal" in every local market

The chart above is based on market data ending April, 2012 (the most recent available).    The calculation for "months of inventory" is based on sales volume and inventory levels during the month.  

Most market analysts would say that 6 months of inventory is about right for a healthy market.    A year ago,  the largest of our local markets (Longmont and Boulder) were well above the six month mark.   Boulder, in particular, was high (no pun intended) - with over 9 months of houses and nearly 12 months of attached dwellings available.

Oh, to be a buyer a year ago.    Today, the market looks quite different.    Every single city in our local area is now at or below 6 months of available inventory.    Broomfield, Louisville, and Superior are actually below 4 months of available inventory.  

Buyers and sellers, heed the warning.    This type of market tends to create intense pressure to make a decision quickly.    Should you write an offer?    Is the offer on the table the best you'll likely receive?   That's where I can help. 

Over the years, I've found the only way to intelligently advise my clients on real estate is to know the market, intimately.    Conditions change quickly and vary tremendously by location, price range, and property type.   Real estate is one of the largest financial decisions you'll make.   If you want professional real estate advice, based on current market conditions and years of experience, give me a call.   303.746.6896.  

---Our goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Silver Fern Homes recommends careful and complete due diligence before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.