Nationally and in select real estate markets like in Denver Colorado a shortage of homes and consistent demand has forced pricing upward. Combined with manufacturing bottlenecks and supply chain breakdowns, the constraint for housing has become further exacerbated for the buyer. The availability of quality homes is now the issue at select price levels. The lack of residential real estate across the country as well as locally has been reduced to a point that affordability for some is out of the question.
In Denver, the real estate market has experienced an influx of buyers (increased demand) while home availability, new and existing has not kept pace with demand. In 2021 Year-over-year results of total home sales has fallen due to supply shortage. Efficient markets would eliminate the housing shortage by having new entrants, builders, and skilled labor, joining the effort to build more homes to meet demand. Likewise, existing homeowners maximizing their own opportunities would choose to list their homes.
The Metro Denver Association of Realtors tracks monthly the changes in the market. The duration of time a home spends on the market is on average .76 months. Compared to the extreme conditions found during the 2008 financial crisis, Denver’s supply to meet demand would need to increase to just over 20,000 units or approximately six months of home availability. Those who believe the housing market is in a bubble merely need to refer to the numbers found within the local market association.