What a whirlwind! Denver’s real estate market has been in a non-stop hustle since April of 2020, but signs are starting to point to a possible slow down. How do we know? Well, numbers are showing a shift. Let’s take a look at what’s going on...
A Quick Review
COVID hit last March which initially slowed the market down, but as April moved into May, inventory started declining as demand started increasing. This created a situation where a steady drop in inventory with a strong demand from buyers, (which only continued to escalate), created a significant increase in housing prices. In June 2021, sellers were accepting offers that were 25%+ above May 2020’s listing prices on single family detached homes. And the Denver metro area saw the average listing price of a single family home hit $700,559 for the first time ever! Becoming increasingly unfriendly to buyer’s budgets and so competitive that buyers have been getting downright exhausted with multiple failed offer attempts.
The Numbers Now
In mid-May as the mask mandates began to lift, confidence started building more among sellers which made more inventory available over the past month. In June, national listings were up 5.5% year over year and 11% since the end of May. Locally, Denver saw a 6% increase year over year and 24% increase in listings since May! With 7,826 homes added to the market in June, Denver’s active inventory increased to 3,122 by the end of the month which is a 50% increase in one month! Not at all a healthy market for this time of the year historically, (the past 30 year average is 16,098 listings by the end of June), but moving in the positive direction. And consumer confidence is at its highest since the pandemic, with lower unemployment, pushing the market to even greater strengths.
So What Does This Actually Mean?
Simply put, more inventory creates less demand. As more homes are listed, more opportunity is created. Home buyers can take a deep breath and consciously start looking at the latest listings with slightly less fear of the property getting snatched up immediately. And their focus has diverted a bit as summer brings vacations, sporting events, weddings, and other attention detractors creating a few less buyers and therefore more available inventory. This also correlates to more normative listing prices. Homes aren’t being listed so outrageously, but rather what the comparables are showing, as value is starting to mean more. Does this mean buying now is still competitive? Yes, but not out of the question. I would encourage you to continue your search. In the last year, homeowners have earned on average 18% in value just by owning their home. That’s building wealth by just sitting on your property! Denver has a track record of being one of the best markets for long-term real estate investment in the U.S. (according to Zillow), and in the top 10% nationally for real estate appreciation (according to Neigborhoodscout.com). Denver’s economy is strong so even though the housing market frenzy has cooled off a bit, this could mean more opportunity for buyers to create a long-term investment in real estate. Sellers, your properties are still in demand. There just isn’t enough inventory available to balance out Denver’s seller’s market quite yet so if you’re still on the fence about listing, let’s take a look at your specifics. As always, if you have any questions, real estate needs, or would love to send a referral my way, I am more than happy to help!