Colorado Real Estate News

Real Estate Market Trends

What Pandemic? 2020 Denver-area Housing Market is Hot!

Amid the COVID-19 global pandemic, the 2020 metro-Denver housing market is on pace to outperform last year’s record-breaking real estate market.

If you recall, July of this year hit a record high number of home sales in any given month in metro Denver. In August, while home sales dropped compared to July by nearly 19%, the 5,959 total homes that did sell signified the most sales for any month of August on record. Yet, at the same time, the number of active listings at month end in August was down 41% year to date compared to 2019. So, if there were more homes available on the market in August, there is no doubt many more would have sold.

Single-family Homes are Scarce

Homebuyers looking to purchase a single-family home really struggled because there were 50% fewer single-family homes for sale year over year in August. Furthermore, single-family homes priced between $500,000 and $749,999 had only 0.66 months of inventory which is an extreme seller’s market where demand outpaces supply. Based on that number, the market would technically be out of homes for buyers to purchase in two to three weeks if no other inventory hits the market.

Home Prices Still on the Rise

As buyer demand continues to outpace supply, prices continue to go up. The average price for a single-family home hit another breaking record at $606,330 in August, an increase of 5.6% year to date.

Condo sales weren’t doing quite as well as average August prices were down month over month in August, but still up 2.6% year to date. The Denver market is a seller’s market across the board except for condos priced over $1 million where the market is more balanced between buyers and sellers.

If these current trends continue, COVID-19 may have just been a blemish on our year-end housing figures, as the Denver-area market is insulated by strong population growth, a variety of industries and quality of life that isn’t going anywhere.

Colorado Real Estate News

Real Estate Market Trends

High Buyer Demand in Metro Denver

A record number of Denver-area homes on the market went under contract in June, home prices are on the rise, mortgage rates are a record low and the market is experiencing near record-low housing inventory. These factors are making for a strong seller’s market.

In June, a record number of homes, 7,676, shifted into a pending sale status, up 16% month over month and 27% year over year. Additionally, weekly home closings were back above 2019 levels, ending 11-weeks of a COVID-19 induced housing slump.

Home Prices Rising

In March, pre-COVID-19, the average price for a residential property in metro Denver zoomed above $500,000 for the first time, to $513,535. That price then dipped back down below the half-million-dollar mark during the home-showing shutdown and uncertain economic times in April and May. In June, however, average prices bounced back up to $509,736, the second-highest average price for residential real estate in Denver.

Luxury Market is Coming Back

In June, 7,364 homes were put up for sale in all housing price points, but demand was even higher. More homes were put under contract than came on the market for sale. Less inventory meant home sellers had more power. The only segment of the market in which homebuyers had the edge were condos priced over $1 million. Overall, after the halt earlier this year as a result of showing restrictions and consumer uncertainty stemming from COVID-19, the Luxury Market is picking back up.

The number of homes sold in the single-family luxury segment was up 100% in June to 230 from 115 in May, and up to 15 from eight for luxury condos, an 87.5% increase month over month. At the end of June, there were 413 pending sales, up 38% from last month and an impressive 59% from last year. 

Year to date, Luxury Market listings were up 1.76% over last year. There has been double-digit growth since 2016, so under 2% growth is a significant figure that depicts the true damage stemming from COVID-19.

*Written July 7, 2020. Updates may be available after this date.

Colorado Real Estate News

Real Estate Market Trends

New listings flood the metro-Denver housing market in May

As stay-at-home restrictions stemming from COVID-19 loosened and businesses began phased openings in May, metro Denver had a surge of new listings hit the housing market, up 56% month over month to reach 7,312. Some of the surge can be attributed to sellers putting their homes back on the market after withdrawing them when showings were halted back in March.

Home sales down as expected in May, but homes under contracts skyrockets

The number of sold homes was down 20% month over month and 49% year over year in May, following the weeks of strict home-showing restrictions. The average sold price of a home dropped slightly, back below $500,000 to $495,925. That was 1.24% lower than April but 2.43% higher year to date.

Notably, homes under contract increased a substantial 115% from the previous month.

Home sellers had the upper hand, except in the Luxury Market

There were 7,170 active listings at the end of May, 4.6% more than April but 19% less than the previous year. Home sellers had the upper hand with low inventory in all price ranges except for homes priced over $1 million, where there was 9.5 months of single-family inventory and 25 months for condos. Anything over six months is considered a buyer’s market.

Only 115 homes sold and closed for $1 million or greater last month, down 29% from April and 59% year over year. The closed dollar volume in the luxury segment in May was $174.4 million, down 24.4% from April and nearly 60% year over year.

While the last few months were slower stemming from the pandemic, year-to-date data reflects how hot the metro-Denver real estate market was at the beginning of the year. For example, new listings year to date for single-family luxury homes is only down 1.47% and luxury condos are up 10.45% compared to this time last year.

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Real Estate Market Trends

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Dramatic shift in real estate since March.

 

Real estate in metro Denver, Fort Collins and the Front Range was primed to be one of the strongest on record at the beginning of March, but took a swift turn later in month due to the impacts of the pandemic. Stemming from Colorado Governor Jared Polis “Stay-at-Home” Executive Order for the entire state on March 25, real estate was classified as an essential service – and the way real estate is transacted has changed significantly.

 

As a company, Kentwood Real Estate has identified ways to safely comply with the order while facilitating transactions that really need to happen – and help clients who very much need guidance right now.

 

Virtual tools are being leveraged and they have proved to work well for homebuyers and sellers today, such as listing photography, virtual tours, e-signatures on contracts and contact-free closings. There are even new components of a contract, like the COVID-19 Addendum that allows a transaction to be extended in the case a homebuyer or seller is exposed or quarantined. These changes are necessary to keep our community safe, and ultimately the health and safety of our fellow neighbors is the most important factor when considering how to responsibly serve homebuyers and sellers.

 

As elements of the executive order begin to be lifted, these virtual tools will remain common practice and will continue to be necessary to maintain the safety of our community.

 

The real estate market throughout Colorado is in a healthy position to come out of this unprecedented situation with strength. There remains a lack of supply and high demand, and that is what keeps prices stabilized and even increasing. While the second half of March notably saw a significant number of homes taken off of the market, they will begin to come back on the market in the near future. The pent-up demand will be evident over the summer, and anyone thinking of selling in the next few months will be able to successfully do so.

 

*Written April 17, 2020. Updates may be available after this date.

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How the Coronavirus is Impacting the Denver Housing Market

Kentwood Real Estate is monitoring the ever-changing real estate landscape stemming from the coronavirus COVID-19 situation. We are staying informed and following the guidance of the CDC, Colorado Department of Public Health and the National Association of REALTORS® to ensure we are providing our clients with the ultimate in ethical, professional representation – we will take all measures to ensure a safe, productive experience.

 
What we are seeing in the metro-Denver residential real estate market today is that overall buyer demand in the local market is keeping activity strong. Historically low interest rates are motivating buyers, and we continue to see multiple offers. While many sellers are continuing to list their homes, some are choosing to pause temporarily. In the case more sellers wait, there will be an increased strain on housing inventory.


Housing Inventory Challenges

In February, while the stock market struggled with coronavirus fears, real estate stayed strong. Month over month, 5.6% more homes came on the market, 7% more homes shifted into a pending status, and 3% more homes closed.

 
The month ended with only 4,835 active listings, down 2% from January and nearly 20% year over year. For perspective, 5,083 listings went under contract in February; so, figuratively speaking, only 39 new listings came on the market that didn’t go into contract.


The ‘New’ Home Showing

To accommodate buyers in today’s new normal, listings are sanitized ahead of showings, and hand sanitizer and booties are readily available. Furthermore, virtual home tours are quickly growing in popularity. Facetime to more advanced 3-D technology are being utilized and becoming a preferred method of house hunting by many.

 
Real estate remains a good investment. We believe the security of real estate as a safe haven from both a psychological standpoint and an investment standpoint will resonate in future weeks and months. Real estate has always weathered economic turmoil in the long run, and will do so now.

Colorado Real Estate News

Real Estate Market Trends Article

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The New Year Kicks Off Briskly for Denver-area Real Estate

In January, a massive influx of new homes came on the market in metro Denver but were quickly scooped up by homebuyers.

 

While 4,853 new listings hit the market, up 89% from December, January ended with 4,941 active listings because homebuyers placed 43% more homes in pending status month over month which diminished the housing inventory surplus.

 

Contributing factors to the market heating up quickly included continued low interest rates and 18 days above the average temperatures in January.


On the Heels of a Slow December

In the entire residential market, there was about a 35% drop in the number of closed homes and sales volume month over month in January which was a reflection of the slower market activity at the end of 2019. As usually occurs this time of year, the days on the market were longer, averaging out to 45 compared to 41 in December.


Steady Home Prices

The average single-family home price was down from its summer highs, but higher year over year by 6.86% to $532,494. The picture is a little different for condos that experienced a 5% month-over-month drop in average price to $355,754, which is also down 0.37% from the same month last year; representing the first price drop in the month of January in at least the past four years.


Homebuyer Advantage in the Luxury Segment

In the Luxury Market, homes priced $1 million+, months of housing inventory increased to 6.92 for single-family homes and 8.5 for condos, up 41% and 68% month over month respectively. So, luxury homebuyers are not having to compete as much as other price segments.
Year over year in January, 11.7% more single-family homes and 20% more condos closed in the Luxury Market. The number of homes that closed in the entire residential Luxury Market was up 12.6% and total sales volume was up 4.7% from one year ago. However, sales volume and the number of homes closed in the entire luxury residential market were both down 46% month over month.

Colorado Real Estate News

More New Homes Hit the Denver Market in May

CORYMERRILL7 copy2More Home Choices in May

In May, there were 8,789 new listings, up 17 percent from the previous month. That meant home-buyers were able to look at a number of homes at a time and make comparisons – and many found what they were looking for. At month’s end, there were 6,470 homes under contract, up 5.65 percent from April.

Even with all of those offers written and accepted, the month still ended with 8,891 homes for sale. That is the highest end-of-month number of active listings since November 2013 when buyers had 9,352 choices! Yet, when put in perspective, it’s very low compared to the high in May 2008 when active listings reached 26,333 in total.

Home Prices Breaking Records

The market has been experiencing a drought of new homes for years, so the increase in inventory is a welcome relief for buyers. Even with the added inventory, prices were still up. The average single-family home price reached a record-breaking $555,482!

Year to date, for single-family homes, the average sold price was $534,577 and median sold price was a record-breaking $450,000, up 1.45 and 1.12 percent from last year respectively. The average sold price for condos year to date bumped up 3.11 percent compared to last year to $364,134, and the median price topped out at a high of $301,500.

Luxury Market Sales Steady

The number of sales of $1 million+ homes remained steady at 915 year to date, up 1.55 percent from last year. While sales in the single-family market decreased year to date by 2.8 percent from 2018, there has been a large jump in condo sales with 110 sold year to date compared to 73 in 2018, an increase of 51 percent.

There has not been any significant changes month over month or year over year in terms of price per square foot, outside of the condo total price per square foot metric that significantly jumped from $546 last year to $656 in May of 2019 – an increase of 20 percent. Single-family average price per square foot continues to hover around $300, ending May at $297.

Colorado Real Estate News

Love Was In The Air In February’s Real Estate Market

February's Real Estate MarketLove was in the air in February’s real estate market

In addition to the number of homes under contract being up nearly 16 percent month over month in metro Denver, the Luxury Market (homes priced $1 million plus) faired particularly well too. Last month, 119 homes in the luxury segment closed for a total of $178,766,560 in sales volume, accounting for an over 23 percent increase from January.

Of course, long-term home closings in the Luxury Market are down 6 percent year over year, making the start to 2019 slightly more challenging. But, with 6.58 months of housing inventory, March is a great time to take the market back in bullish fashion for this luxury buyer’s market.

Yes, the selling—and buying—season is back!

In fact, the average number of homes sold in February’s real estate market increased by nearly 5 percent month over month. The culprit? Potentially the 5.6 percent increase in listings from January, which is 47 percent stronger than buyer choices a year ago. And because more single-family homes went under contract than were listed in February, housing inventory surplus is eroding.

For the condo market, however, the number of listings continues its four-year upward trajectory. In fact, there was a notable 79 percent rise in active listings at the end of February.

Freddie Mac also tells a story of ascent in the housing market: With the strong job market and a gradual decline in mortgage rates for the second straight month, housing demand continues in 2019.

No better place to be than at a Mile High

According to Forbes, Denver is the most competitive housing market in the nation. What does this mean for you? That there are far fewer homes for sale than buyers in Denver, putting this market solidly in a compression phase of the housing cycle. And what can you expect? That this cycle will continue while prices rise steadily through June. If it’s anything like years past, we’ll start to see buyer fatigue and inventory hit an annual high in July.

In February, there was a 47 percent increase in active listings year over year for the residential market as a whole, generating a 5.6 percent increase in new listings compared to January.

Denver is still in a strong seller’s market for single-family homes in the non-luxury segment, with only 1.92 months of inventory available.

As an interesting aside, Denver is sixth on the national list of apartments completed, with 11,700 apartments built in 2018.

Colorado Real Estate News

Denver’s Active Inventory of Homes Sees Growth

Prospective home buyers in Denver have reason to cheer! There are more homes to choose from today than in the past four years. While there still aren’t enough homes on the market to satisfy a city the size of Denver, the active inventory is starting to climb. In fact, since July the active inventory has grown by 7.36%. At the end of August, there were 8,228 active listings on the market. A near 12% increase from the 7,360 homes that were on the market a year ago. Of these active listings, 6,121 of them were single-family homes, which equates to almost 75% of all the listings.

New Active Inventory Hits The Market

Last month, 6,636 new listings hit the market, far exceeding the 5,073 homes that were sold. The number of homes sold last month dropped by 11.48% from a year earlier. And the average price of all homes sold in August was $478,838. Largely flat from July, but up 9.73% from August 2017. Rising home prices, coupled with rising mortgage rates, have dampened sales in Denver. A 30-year, fixed-rate mortgage is averaging a bit under 4.5%, whereas, a year ago rates were slightly under 4%.

While access to more homes is good news for home buyers, Denver remains a strong seller’s market. There is only a 1.68-month supply of unsold homes. Meaning if no new homes were added to the market and sales stayed the same, all homes would be sold in just 7.3 weeks. And while the months of inventory is up 7.6% from a year ago, rule of thumb indicates a market is in equilibrium when there is 4-month to a 6-month supply of unsold homes.

The Luxury Market Is On A Roll

The luxury market with homes priced at $1 million, remains the one segment that continues to defy the overall trend. There were 191 luxury home sales in August, a stunning 31.72% increase from August 2017. Luxury single-family homes saw an even bigger year-over-year increase, jumping by 37.4%. There were only 5.10 months of inventory for luxury homes in August, a 38.4% drop from August 2017. Indeed, homes priced at the top of the market are the only segment of the market that is balanced.

For the overall market, now is a good time to be house-hunting. Mortgage rates, while no longer at historic lows, are still low by historic standards.

Colorado Real Estate News

April Sees a Spike in Denver’s Inventory of Homes

Small House With Sold Label Attached To ItOften, when taking the pulse of the housing market, we look at the average sales price of a home, the number of homes that have sold, and the active inventory. These are all important metrics when determining the health of the market. Indeed, in April, the average price of a single-family home sold in the Denver metro area soared to a never seen-before record of $543,068, according to a report by the Denver Metro Association of Realtors.

One of the most promising measures of market strength was not the record home price, but the number of homes placed under contract. According to DMAR, 6,097 single-family homes, condominiums, and townhomes were placed under contract last month. That was the best April for under contracts since 2013, when 8,223 homes were placed under contract. Last month was the first April since 2014 that more than 6,000 homes were placed under contract.

One of the best indicator of the sales activity in any given month is how many homes go under contract. Sales, by contrast, measure the number of homes that were placed under contract in previous months. There were 4,384 total sales last month, almost a 9% drop from April 2017. Of course, a certain number of homes placed under will not close. But in Denver, where there is only a 1.24-month supply of unsold single-family homes, some buyers are often able to purchase a home that did not close under its initial deal.

Buyers also had more homes to choose from in April than in March. 6,917 new listings hit the market in April, a 9.12% increase from a year earlier and almost a 5% increase from March. Homes also sold much faster in April than in March. Buyers, on average, snapped up listings after they were on the market for a mere 20 days in April 23% faster than the sales pace in March.

Sellers also did a good job of listing their homes at the appropriate price. The average closing price for a single-family home was slightly above the average listing price, according to DMAR. Overall, homes closed at just under 1% over the listing price. The mix of homes sold likely helped drive up the average price of single-family homes in April.

Once again, the luxury market of homes priced at $1 million or more was the best-performing price strata. A total of 196 luxury single-family homes and condominiums traded hands last month. Which was the best April on record for luxury home sales.  Luxury home sales were up 33.33% from a year earlier. Luxury single-family home sales led the way, with 184 homes closing, a record for an April. That was a whopping 40.46% more than a year earlier. Total sales volume of luxury single-family homes rose to $281.6 million, soaring 41.13% from April 2017.