September is still going strong!
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.
It seems like we’ve blown right through September - Market Monday did take the Labor Day holiday off! We’re back at it - and I realized I hadn’t followed up on the predictions/guesses we made around the holiday week! You can skip ahead to the third paragraph for the Labor Day numbers rundown :)
Where are we compared to previous years? The August average active detached unit count 2013-19 was 6,490 – in 2020, that number was 2,719 (down by 58.1% from past years)! Another metric we look at is Odds of Selling – the 2013-19 August average is 50.7%, while 2020 is at a whopping 73.4% (+22.7%). These numbers (among others) tell very favorable story for sellers. Average/median days on market are also down – as soon as a listing goes active, there is a pool of eager buyers ready to make offers and snatch it up.
What about if you’re a buyer? I hate to say it - but be prepared for competitive. Multiple offers drive the price up, which in turn usually calls for appraisal gap coverage (offering to bring extra cash to cover the amount of a potential discrepancy between your offer price and the appraised value). If you aren’t in a position to cover that gap, consider looking at properties that have been on the market for a few weeks (or longer). If you don’t have to compete, you are unlikely to have to offer gap coverage. It can be easy to get caught up in fresh listings coming on the market, but if you look back at slightly older listings, you might have a better chance of getting your offer accepted at or under list!
Re: Labor Day week: with kids going back to school (in-person, virtual, or a combination), plus the change of seasons and the start of football season, we were all waiting to see what would happen with Labor Day weekend. The past two big holidays, Memorial Day and Independence Day, only saw half of the drop we expected to see in showings and contracts. At all price points, Labor Day week saw a 14.3% drop in total showings from the prior week – but the following week (9/9-9/15) more than recovered, back up 15.2% from the holiday week. This tells me that while some folks took the holiday week off, they were back in full force the following week – and it certainly seems like this buyer demand will continue over the next few weeks at least.
Inventory and interest rates will remain low for the foreseeable future – but will buyer demand cool off as we head into winter and holidays? We don’t know – but I’ll keep an eye on the numbers and report any shifts in the market here!
Questions or Comments? Leave them below or contact me at the button!
Numbers and stats from Megan Aller, First American Title.