Colorado market stats are only useful if you pull them fresh and explain what they mean for one buyer or one seller. Most agents do the opposite. They quote a headline from three months ago and then guess where prices are going. Don't do that. Here's how I teach agents to read the five numbers that matter, pull them live from the MLS, and explain them in plain words without ever making a forecast.
The short answer
Five numbers tell most of the story: months of supply, days on market, list-to-sale ratio, the share of listings with price cuts, and the share of sales with seller concessions. Pull them from the MLS for the client's exact area, price range and home type, and write down the date. Explain what each number says about negotiating power today. Never say what prices "will" do. Say what the numbers show now and what that means for this offer or this listing.
Step by step
- Pull live, every time. Run the stats in the MLS the day you use them. In the Denver area, use your regional MLS. Note the date, area, price band and property type.
- Match the slice to the client. A metro median mixes condos, houses and luxury homes. Filter to the client's area, price range and home type.
- Months of supply. Active listings divided by the average monthly closed sales. It tells you how long the current inventory would last at today's pace. As a rule of thumb, lower numbers favor sellers and higher numbers favor buyers. Many people call about six months "balanced," but treat that as a guideline, not a law.
- Days on market. How long homes take to go under contract. Check whether your MLS shows days on market or cumulative days on market. A relist can reset the clock. Use the median, not the average, when a few slow listings skew it.
- List-to-sale ratio. Sold price divided by list price. Check whether it uses the original list price or the last list price. A home that cut its price twice and then sold at "100% of list" really sold well below its original ask.
- Price cuts. The share of active listings with at least one price reduction. A rising share means sellers are adjusting to buyers.
- Concessions. The share of closed sales with a seller credit, and the typical size. This tells buyers what to ask for and tells sellers what to expect.
- Compare the same months. Real estate is seasonal. Compare this September to last September, not to last spring.
- Name your source. On your own client reports, write where the numbers came from and the date. On public pages, follow your brokerage's and MLS's rules for displaying data.
How to read the five numbers (illustration only)
| Stat | Example reading | What it might mean for a buyer | What it might mean for a seller |
|---|---|---|---|
| Months of supply | 5.0 | More choices, more room to ask | Price it right from day one |
| Median days on market | 30 | Some time to think | Expect showings to take a few weeks |
| List-to-sale ratio | 98% | Offers below list may get a counter | Small gap between list and sold |
| Listings with price cuts | 30% | Look for homes that have cut | Overpricing gets punished |
| Sales with concessions | 60% | Ask for a credit | Budget for a credit in the net sheet |
Illustration only. These are made-up numbers to show how to read the stats. They are not current market data. Pull live numbers from your MLS for the client's area, price range and home type, and date them.
How to explain it to your client
"I pulled these numbers this morning for homes like yours in your area. Right now there's about this many months of supply, and homes are taking about this many days to go under contract. About this share of sellers have cut their price, and most sales include some kind of credit to the buyer. I can't tell you where prices will go, and anyone who says they can is guessing. What I can tell you is what buyers and sellers are doing today, and that gives us our plan."
Watch-outs
- Stale numbers. Last quarter's stats can be wrong today. Always pull fresh and date them.
- Predictions. Don't say "prices will drop" or "now is the time before prices go up." Describe today's facts.
- Wrong slice. A metro median says little about a condo in one ZIP code or a luxury home in another. Filter.
- Average vs median. A few very expensive sales pull the average up. Use the median for "typical."
- Mix shift. If more condos sold this month, the median can drop even if no home lost value. Explain that.
- Original vs last list price. Know which one your list-to-sale ratio uses.
- Different sources, different areas. One report may cover seven counties and another eleven. Don't mix them in one sentence.
- Copying headlines. Use your own MLS pull for client advice. Headlines are a starting point, not your answer.
Further reading
- Denver Real Estate Statistics on kennarealestate.com
- Colorado Home Sales Fall 15%: 80% of Denver Deals Had Cuts on kennarealestate.com
This is training for real estate agents. It isn't legal, tax or lending advice. Check with your managing broker.
Questions
What is months of supply?
Active listings divided by average monthly sales. It shows how long current inventory would last at today's sales pace.
Is it a buyer's market or a seller's market?
Look at months of supply, days on market, price cuts and concessions for that client's slice of the market. It can be a buyer's market for condos and a balanced market for houses in the same city.
Can I quote numbers from news stories?
You can point to them, but for client advice, pull your own MLS data for their exact area and date it.
What if a client asks where prices are going?
Say you don't predict. Show what the numbers say today and what that means for their offer or listing.
Where do official Colorado numbers come from?
Local REALTOR associations publish monthly reports based on MLS data. Your MLS is the best source for a client's exact area.
Brian Lee Burke is the founder of PadLeaders, a Colorado real estate broker licensed since 2003, team leader of The Kenna Group at Keller Williams DTC (formerly Kenna Real Estate Group) and the author of Mastering Real Estate and The Real Estate Playbook. More about Brian.