Number of homes for sale decreases in metro Denver

Home-buying in metro Denver took a slight breather in January after a robust December, but a lack of inventory threatens to cut off the market’s oxygen if more sellers don’t start showing up soon.

“Activity in January was good,” said Gary Bauer, an independent real estate analyst who prepares a monthly home sales report. “But inventory is the topic right now.”

Buyers closed on 2,470 residential properties in January, a 21.7 percent decline from December, but a 14.6 percent increase from the 2,156 homes sold a year earlier.

Buyers and sellers often rush to close deals in December ahead of the year’s end, so January is often a slower month, Bauer said.

The number of homes for sale, however, took another tumble, falling to 10,443, a 5 percent decline from December. Inventories are down 41.6 percent from January 2011, when 17,890 homes were available, and by two-thirds from the all-time peak reached in July 2006.Normally, a big decline in supply should signal a bottom in the market. As demand outstrips supply, prices rise, but that hasn’t happened yet.

The median price of a single-family home sold dropped 2.7 percent to $218,855, compared with $225,000 for January a year ago. It is down 4.8 percent from December’s median $230,000.

Explanations vary. One is that banks have moved slower on foreclosures, reducing the supply of distressed properties hitting the market. The other is that home values have fallen so much that some sellers can’t get out without bringing money to the table. Rising prices would help those trapped sellers and entice others looking to make a return.

“It is trending towards a seller’s market,” said Randy Hay, a broker with Keller Williams DTC. “Prices are going to have to go up.”

Hay said he listed a $90,000 townhouse Monday and by Thursday was courting a serious offer. Although sellers are still expected to offer buyers concessions to help with closing costs, they are getting the full asking price and multiple bids on well-maintained homes priced under $300,000.

How low is too low when it comes to inventory? Bauer said he would become concerned if the number of homes for sale in metro Denver inventories goes below 9,500.

Aldo Svaldi: 303-954-1410o

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