I’m always intrigued by numbers, and like everyone else I’ve been trying to figure out why there’s so little inventory in our red hot Denver metro housing market.
So this morning I decided to run some simple calculations merging US Census data with Denver MLS data to figure out where homes are most (and least) available, statistically speaking.
For methodology, I pulled US Census data from 2013 on the number of available housing units in several metro area cities, and then divided that number by the number of closed sales over the past 12 months.
Here's what I found…
Arvada - 44,503 housing units / 2,372 closed sales ...equals 1 sale for every 18.76 homes
Broomfield - 23,630 housing units / 1,234 closed sales… equals 1 sale for every 19.14 homes
Golden - 7,859 housing units / 679 closed sales… equals 1 sale for every 11.57 homes
Lafayette - 10,791 housing units / 415 closed sales… equals 1 sale for every 26.11 homes
Lakewood - 65,094 housing units / 2,656 closed sales… equals 1 sale for every 24.50 homes
Westminster - 43,336 housing units / 1,993 closed sales… equals 1 sale for every 21.74 homes
Based on this survey, the tightest of these housing markets is Lafayette, with one out of 26.11 homes being sold in the past 12 months… and the loosest, surprisingly, is Golden, with one sale for every 11.57 homes.
Why would more homes turn over in Golden? My best guess is because of the high number of older people who live here, and the number of investor-owned rentals related to the School of Mines.
The average tenure for a home owner in the US today is between 8 and 10 years, which means there should be one sale annually for every 10 to 12 homes in a community. Only Golden in holding to that statistical norm right now.
Even with significant equity gains and cash profits waiting to be realized, sellers aren’t selling. And as long as sellers won’t sell, buyers in the metro area will keep having to pay more.