Mayfair Market Analysis
Denver’s Mayfair Neighborhood Market Analysis
We recently completed an analysis for a client in the Mayfair neighborhood of Denver, Colorado to help them understand what price they might achieve and how long it might take to sell their property.
All cities are complex, living organisms that are constantly changing. The real estate market is just one of many that is driven by local conditions. Local, in this context, means neighborhood and perhaps even sub-neighborhoods, or segments within neighborhoods.
In any neighborhood there are sales dynamics that help buyers and sellers understand when to sell, buy, and at what price. These dynamics, or drivers, are based upon the historical sales data. Often these data are not easy to interpret and require slicing and dicing to get at the truth and the real story.
In doing a comparison, it is important to understand the differences within a neighborhood and compare the most similar in age, architectural style and size.
We selected similar houses in Mayfair within a 6-block radius of our client’s property.
In this segment in the Mayfair neighborhood over the last 6 months there were 31 sales, or 5 per month. There were 17 new listings during that period. 31 houses went out of inventory and only 17 came in which, in effect, is an inventory reduction of 14 houses.
The days-on-market (DOM) have been steadily increasing with greater variation in the time it takes to sell a home. Days-on-market have increased 22% since July, traditionally the hottest month of sales. This is a leading indicator of a reduction in prices to come. Smart buyers will recognize this trend and will offer prices that reflect the future price.
Since July inventory has dropped 17% to only 5 months of inventory, This is a good sign for sellers. The existing inventory has been absorbed by sales occurring at a faster pace than new inventory entering the market. For sellers, this is exactly what is needed. Lower supply means higher prices. However, it also reflects the sellers’ uncertainty about the market. If they don’t have to sell they are holding off.
The basic driver behind price, Price Per Square Foot (PSF) has also declined since July (by 17%). In addition, the active listings are showing a 14% average PSF reduction from the prior 6-months.
Diminishing inventory, increasing DOM, decreasing prices: what do they mean?
Both buy and sell activity have diminished significantly in Mayfair. Increasing DOM is producing lower prices. Fewer buyers are looking. Mr. Seller, hold your property until the DOM begins to drop and the inventory levels drop even further. Then sell.