Happy summer, everyone!
To say that a lot has happened since the last time we chatted would be a gross understatement; 2020 continues to challenge our mettle in myriad ways, and we continue to prove that we are resilient, resourceful, adaptable, and always prone to growth. We hope above all else that you are safe, sane, healthy, and happy. We’re all certainly welcoming summer and the chance to be outdoors as often as possible with open arms.
Our real estate market really opened back up for business at the beginning of May, and “resilient” would be a pretty accurate word to capture its response for being shut down for all of April.
We weren’t sure what was going to happen once we were able to open back up; would we see a flood of listings? What would buyer activity and demand look like? How would the economic effects of COVID manifest in real estate?
Well, we’re starting to get some answers to some of these questions. As it turns out, we did not see a flood of listings. At the end of May, the market boasted 7,170 active homes on the market, which represents a 20% drop when compared to May 2019 data. We saw our months of inventory dip below one, which means that there are more buyers in the market than there are homes for them to buy. This answers another question from above…what would buyer demand and activity look like?
Buyer demand and activity is very high.
In May, we saw 6,322 homes go under contract, which represents the highest amount of homes going under contract ever. For context, average pending transaction in May from 2013-2019 is 5,600. Interest rates are at historic lows, hovering between 3.0-3.5%, and buyers have been out taking advantage.
So, generally speaking, we’re in the same kind of intense seller’s market we’d gotten used to seeing before COVID paused our world.
There are some interesting counterpoints to this though, that are worth noting. The condo market, especially in and around Downtown Denver, has shifted to a buyer’s market, with around 9 months of inventory (9 condos to choose from for every one buyer). It seems that people are looking to avoid condos and close quarters after everything we’ve dealt with over the last two months. This level of demand is also not likely to maintain–it’s going to drop off at some point.
So, what are the big takeaways from this?
1. If you’re looking to sell your single family home, now’s your time. We need the inventory, and the demand and affordability is there.
2. If you’re thinking about selling your condo, you might want to do a deeper dive into some other options. It may be that your best course of action is to rent out, or hold tight for the time being. If you have to sell, know that your situation might be quite different compared to the rest of the market.
3. If you’re looking to purchase a single family home, especially below $600,000 or so, get out and start looking as soon as you can. Get pre-approved, and be ready to fight hard for the home you want. You can afford it, but you’re likely to be competing.
Please don’t hesitate to check in with me at any point if you want or need to dive a little deeper into these numbers, and see where your needs fall into them. I’m always happy to chat.
Until next month, continue to take care, and I hope your summer is off to a great start!