Written by Gretchen Rosenberg, President and CEO of Kentwood Real Estate
From the beginning of the pandemic in 2020 to the end of the year, it was a tale of two housing markets. Dead in the water and busier than ever. All indications are that we’ll see an even stronger market in 2021.
Mortgage rates are holding at record lows and are driving this continued momentum, with average rates hovering at or below 3%.
National Association of REALTORS Research
The NAR publishes an annual Realtors Confidence Index Survey which suggests that buyer demand across the country is incredibly strong. This is holding true for residential real estate markets across Colorado. However, supply does not match demand. New listing inventory is not keeping up. Here’s a breakdown by state provided by NAR:
You can see on the maps for Colorado that buyer traffic is high, but seller “traffic” is low. With such a limited supply of homes for sale, record-low inventory is fostering a lot of frustration for buyers.
NAR also reported recently that the actual number of homes for sale stood at 1.28 million in November, down 22% from November 2019. Metro Denver had a 0.8-month supply of homes for sale in November 2020. Fort Collins and Northern Colorado fared slightly better with 1.9 months of available inventory at the end of December 2020. In a normal or balanced market, the number would be 6.0 months of inventory – significantly higher than it is today.
How are Buyers and Sellers Impacted?
Buyers will need to reserve an abundance of patience with the process of securing a home while being ready to quickly act when they find the right place. Bidding wars are a frequent occurrence, in nearly all price points. We hope this gets better as we enter our typically busy listing months of February – May.
Sellers – this is a great time to begin the process of getting your house ready for market. The highest prices in any given year are usually set during those busy early spring months. With our high buyer demand and the perpetually low supply, now is a great time to sell a house. If you sell and need to find a replacement property, consider locating a temporary housing situation. That way you’ll have your proceeds banked and can be ready and competitive when you find your next home.
2021 looks to be another rip-roaring year for residential real estate in Colorado. Take advantage of low rates, pent-up demand, and the need for more inventory to hit our markets. Contact a Kentwood broker today to learn more about the specifics of your area and market and get ready to jump in.