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Denver Metro Real Estate news

A metric we like to use at Your Castle Real Estate to gauge the strength of the market in the upcoming few months is the number of showings that have occurred per listing per month in the current market. Put simply – the more showings per listing, the more interest there is from
buyers to purchase a home (you can’t sell a house you don’t show!). It’s a very handy formula to determine what the sales volume will be in the following few months. For example; during the period before the tax credit of 2010 expired (Jan. – April, 2010) there were 8.8 showings per listing per month, which translated into strong demand for properties and a lot of sales the following couple of months. Turns out if you pay people to buy a house they’ll buy a house! Immediately after the tax credit
expired, buyer interest plummeted and there were only 4.7 showings per listing per month. This of course preceded a dramatic drop in home sales post tax credit. The lack of buyer interest continued in the period Oct. – Dec. 2010 when there were only 5.2 showings per listing per month. In the past year this number has creeped back into the 7-8 range, accurately predicting reasonable but not overwhelming demand for homes. Fast forward to the present time and something very dramatic has
occurred. In January, 2011 there were 11.2 showings per listing! This is an extraordinarily high number of showings. It’s even more remarkable because it occurred in January, a traditionally slow month. This tells me that an unprecedented number of buyers are out looking at properties and, if history is any guide, this should translate into a high number of closings in March and April. Over time, this metric has been a very accurate predictor of future closings. It will be fun to monitor the market in
the months ahead and I’ll be sure to report back how closely it predicted the upcoming housing market!

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