Since July 2011, we are seeing fantastic, sometimes double-digit gains in the amount of homes sold versus the previous year. The implications of the home buyer tax credit can be seen with a several months of raw data. Because several hundred buyers were able to jump into the market with an $8000 incentive, it made the remainder 2010 and early 2011 suffer.

What's interesting about this graph are the season trends in the Northern Colorado real estate market. June/July have is the peak season where as December/January you'll see the fewest numbers of home for sale. Notice anything different about early 2012?

Both 2010 and 2011 show a very logical and gradual increase from January through April, as expected, but in 2012, inventory remains flat around 1000 units. On top of that, inventory levels are well below the respective 2010 and 2011 levels. Distressed properties are being flushed out and bought, reducing the amount of available homes on the market. On top of that, there is a growing demand for homes, and some sellers are sitting on the sidelines waiting for prices to increase so they can eventually sell at pre-recession levels.

We are very likely to see increased prices, decreased days on market, and increased buyer competition as we continue in 2012.