Uncharted territory!
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.
If you’ve been holding your breath waiting for the market to slow down, we might have lost you. Inhale! (Also good advice for agents with buyers under $500,000 right about now! 😉)
Based on patterns from the past 7 years, we usually expect to see a slowdown starting in July - a shift that creates more opportunities for buyers (though still a seller’s market). If you’ve been following the market (or reading this blog!), you’ve seen or heard that we’ve been seeing a surge of buyer activity, seemingly as a correction to the dent in demand in March and April from COVID-related concerns and restrictions. Given the continuation of this high demand, we are in uncharted territory from here forward.
For some numbers: the average number of active detached single family homes for July 2013-2019 was 6428; July 2020 only saw 3436 active units - a whopping 46.5% decrease! Pending units (homes that went under contract) for July 2013-2019 were 3662, while July 2020 had 4350 pending (18.8% increase). Fewer active units (supply) and more pending units (demand) = competition! Both average and median days on market (DOM) went down - by 9.3% and 26.3%, respectively. Months supply of inventory is also down - by 52.2%.
Attached homes see a slightly different story, with active inventory slightly up from the 2013-2019 average - though pending homes were also up. Days on market actually went up for attached homes - by 35.3% average and 78.4% median! This may be due to more people wanting space and not having neighbors so close - but from my personal experience, well-priced and well-presented attached units are still moving fairly quickly.
One more graphic - take a look at Back on Market on the right: this number is up 40.4% from pre-COVID levels. Back on Market is when a previously pending property becomes available again - meaning the contract was terminated. This could be for nearly any reason - inspection disagreements, appraisal issues, or the loan are some of the most common. I wonder if this statistic is in large part due to buyers’ inability to move forward with their loans, given COVID-related job loss.
Sellers: it still appears to be an excellent time to list your home! Buyers: to get what you’re looking for in this market requires strategy, negotiation, and speed - make sure your agent has all three!
Questions or Comments? Leave them below or contact me at the button!
Numbers and stats from Megan Aller, First American Title.