Happy winter! I mean fall. I mean summer. Whatever. If you’re surprised by the hottest day ever, followed by some snow, you’re doing Colorado and 2020 wrong. None of this should surprise you. Regardless, we hope this message finds you happy, healthy and warm-or-cool enough. Whichever best suits you, It’s here for you.
Speaking of “here for you,” the September market report has arrived, and as usual, it brings some interesting insights into our crazy Denver market. Let’s dive on in…
It’s not news to hear that we’re pretty deeply entrenched in a seller’s market. It’s been this way for some time. However, it’s never been this friendly to sellers who are putting their homes up for sale. Supply and demand is still the culprit.
Demand continues to surge, and homeowners continue to NOT put their homes on the market.
At the end of August, the market sported just short of 5,500 homes for sale – easily a record low for August with the previous low being ~7,400 active units. Typically, this is the time of year we see inventory reach its yearly peak. Last year at this time, we had nearly 10,000 homes on the market, and interest rates were up somewhere between 4.0-4.5%.
Now, inventory has been cut almost in half, and demand has pretty much doubled with interest rates getting locked in regularly below 3%, giving buyers the ability to afford $50,000 more house than they could have last year.
They need that affordability, too. Detached home prices are averaging $606,000, easily the highest they’ve ever been. That represents a 13% increase in equity from January to September. If you were thinking about buying in January or February, but held off for one reason or another, that’s equity you’ve missed, and the house you do wind up buying is now going to cost you about 13% more than it would have.
This demand is showing zero signs of slowing. We have no measures indicating that buyer demand is going to slow any time soon. Homes are still going under contract faster than they’re coming on the market, and throughout the metro area, they’re selling for above asking price.
Detached homes averaged 100.26% close-to-list price ratios in August. That trend is going to continue, and continue aggressively. As I’m writing this, inventory is now down around 4,000.
What does all this mean? Buyers cannot be waiting around. The longer you wait, the more expensive your home becomes. It’s time to get out, get approved, and fight for the home you want.
Sellers, the market desperately needs your inventory. If you’ve been needing to sell, but have held off for any number of reasons, please reach out so that we can strategize what’s best for you, and how to ensure we’re safely, and effectively getting your homes to market.
As always, please reach out if you’d like to do a deeper dive. We’d love to help however we can. Until next month, stay safe. Stay sane. Stay healthy. Look forward to hearing from you soon!