Inventory of all for-sale homes in metro Denver fell 18 percent from October 2013 to October 2014, compared with the national inventory, which was up nearly 15.8 percent, according to Zillow.
The inventory decline is especially acute among lower- and middle-priced homes, said Zillow.
There are almost four times as many homes for sale priced at $357,900 or higher, the top tier in Zillow’s report, than in the lowest tier, priced at less than $219,000.
The inventory of lowest priced fell 31.5 percent compared with last year. In the middle tier, inventory fell 37 percent, and in the highest price tier, inventory fell 0.2 percent.
There were 6,277 metro Denver homes for sale in October, compared with 7,658 last October and 8,167 in October 2012.
Nationwide the inventory of for-sale homes in the bottom price tier rose year-over year in 68.3 percent of the 353 total metros analyzed by Zillow. Inventory in the top price tier rose in 82.2 percent, or 290, of the 353 markets analyzed.
Zillow senior economist Skylar Olsen said metro Denver home purchases are outpacing listings.
“What makes Denver, San Francisco, New York, Seattle different is that they have very strong population growth,” Olsen said. “What is eating up Denver’s inventory is the fact that it is such a popular market. It is a very fast growing market despite the fact that home values are up above peak again.”
Olsen said that in the “really attractive metros — San Francisco, New York and Denver — we want an influx of people all across the income spectrum. We need that inventory to come back on all levels, for all people, for appreciation to come back down to normal and come back to a healthy rhythm.”
She said Zillow has found that that younger adults move toward areas with strong job growth, like Denver. “They are appealing and attractive markets not just because they are beautiful places but because they offer jobs and thriving economies.”
Far more upper tier homes are on the market, Olsen said, because homes have appreciated to the point that many people who owed more on their mortgages than their homes were worth are no longer underwater and can now afford to put their homes on the market.
But many low priced homes still are underwater, she said.
Zillow chief economist Stan Humphries said that even as conditions improve for buyers overall, it “remains a tough row to hoe” for first-time buyers and low-income buyers.
“We expect more demand to come from the lower end of the market in coming years as Millennials overtake Generation X as the largest home-buying demographic,” Humphries said in a statement. “As this happens, builders will be forced to build for these more entry-level buyers, and inventory at the bottom tier should improve, however slowly.”
Howard Pankratz: 303-954-1939, hpankratz@denverpost.com or twitter.com/howardpankratz
