May Market Update

Hello to all! I hope this month’s market update finds everyone safe, healthy, and sane.

I know that’s been a real chore for all of us. Luckily, the weather’s been pretty phenomenal, and we’re seeing parts of our world starting to take baby steps toward recovery. Of course, we don’t know what that looks like yet, nor will we for some time, I’m guessing. But we’re making progress, and progress is always good.

What does progress look like in our real estate market? I’m so glad you asked! Let’s dive in…

On Monday April 28th, Colorado’s Stay-At-Home order expired.

Denver and most of the surrounding counties elected to extend their own Stay-At-Home orders until May 8th. There was widespread uncertainty as to whether in-person showings were allowed or not. All that uncertainty notwithstanding, the Denver Metro Area saw 3,500 showings that Monday April 28th. That represents the highest Monday showing total in 2020…and we weren’t sure if showings were allowed. So far, that has proven to be a good indicator of what was to come, as showing data has continued to remain very strong, with showings happening at rates that exceed pre-COVID levels.

Our market can best be categorized right now as a “compressed” seller’s market.

Since the market essentially paused in March and April, which are typically our busiest months, inventory stalled, and demand became pent up. It’s like COVID picked our market up, and moved it to May – May is when we typically start to see our spring flurry begin to slow down. Instead, we’re seeing that pent up demand gobble up everything the market has to offer, and we’ve seen months of inventory drop from 1.8 to 1.0 over the last several weeks. That means if new listings stopped coming on the market today, it would take one month for every home left on the market to be purchased. A buyer’s market is generally considered to be 6 months of inventory.

So what does this mean? It means we’re in a seller’s market. Demand is rampant, inventory is low, pending and closing data are back on the rise, and buyers who are well-qualified have unprecedented buying power with interest rates as low as they’ve ever been, with no sign of that changing in the near future. If you’re in the market for buying a home, you need to be prepared for a few things:

1. Be prepared for heartbreak.

The best houses that are priced correctly are receiving multiple offers for well above asking price. Chances are very good that you’re going to get beat out, maybe multiple times.

2. Act, and act quickly.

The longer you wait to offer on the house you love, the stronger your offer will have to be. Put your realtor to work, and do it quickly. Be decisive!

3. Get pre-approved before going out.

Many sellers are asking for pre-approvals before letting prospective buyers in for showings as a safety precaution and to ensure buyers are able to actually complete a transaction and obtain a loan.

If you’re considering selling, you need to strike while the iron is hot in order to get top dollar for your home. There is no telling how long this pent up demand will last, so it’s imperative to get your house ready, priced correctly, and on the market as soon as is feasible to ensure your competition is low, and your buyer pool is high and aggressive.

I’m hesitant to prognosticate…

This is all still so unprecedented, it makes any prediction feel like simply a coin flip. There are many more data points to discuss, and opinions and data are changing daily. So, if you have questions or would like to do a deeper dive into some graphs and numbers, feel free to reach out at any point. As always, I’m happy to nerd out over this stuff with anyone who wants to listen.

In the meantime, stay safe. Enjoy the beautiful spring. Stay healthy, and I look forward to hopefully being able to see you all soon. Cheers!