Making up for lost time…
Welcome to Market Monday, where we review the Denver real estate market and break it down into clear and informative bites! If you have any specific questions or areas of the market you’re curious about, reach out and I will do my best to get you an answer.
June 2020 still appeared to be making up for the dip we saw with COVID-related restrictions, with a record number of contracts and continued low inventory. Detached single family (DSF) homes saw 3342 active units in June 2020, down 43.6% from the June average from 2013-2019 - whereas pending inventory (homes that went under contract) was up 26.9% from that 2013-2019 June average, for a record high of 4988! So demand is up ⬆️ and supply is down ⬇️ - and that leads to more competition and more multiple offer situations, which drive prices up. 26.9% of closed DSF transactions in June were at full list price, and 35.6% were over asking. If you’re looking to offer under list price, you may have to keep your eyes peeled!
Based on Junes of past years, we expect to see 1.5 months of inventory for detached single family homes across all price points - meaning that for each buyer, there are 1.5 homes to choose from (I’ll let you imagine what half a house looks like!). In June 2020, we only saw .8 months of inventory - meaning that there are more buyers in the market than homes to sell them. Again, high competition - but when we break it down into price bands, we see that the competition is (perhaps unsurprisingly) concentrated in the $600,000 and under categories, and starts to ease up as prices rise, thanks to the smaller buyer pool for higher priced properties.
This dearth of inventory also means that the market is moving fast - in June, 51.4% of DSF properties went under contract in 7 days or less (38.6% for attached single family). With more than half of active inventory getting snatched up in a week or less, buyers need to be ready to make an offer before they start looking. This means talking to a lender and getting pre-approved or pre-qualified at the beginning of your search! (If you need a recommendation for a great lender, comment here or shoot me a message!)
So what does this mean for you?
If you’re buying: we usually expect to see a slight shift in the buyer’s favor toward late July - take a look at this graphic, showing more fields in red (representing buyer opportunity) starting in late July, including months of inventory, active units, and odds of selling. It’s hard to know exactly what will happen, as we navigate all of the unknowns in the market, but we expect to see a slight shift in the late summer/early fall.
If you’re selling: we normally look at July 4 as a bit of a turning point for sellers - in past years it has signaled the beginning of the summer slowdown and if you had a home to sell, you wanted to get it to market before the 4th. This year, with the pent-up demand from COVID restrictions still flooding the market with buyers, it seems that sellers are still in a good position to take advantage of the market before it shifts. But since we don’t know what’s coming, I would do it soon!
Check back here every other Monday for a quick roundup of what’s going on in the Denver real estate market! You can also reach out or start your search below:
Numbers and stats from Megan Aller, First American Title.