Market Trends Report – Jun 2020
While the number of homes sold was down significantly in May, new listings and homes under contract surged.
As stay-at-home restrictions stemming from the coronavirus loosened on May 9 and businesses began phased openings in May, metro Denver had a surge of new listings hit the housing market, up 56.44 percent month over month to reach 7,312. Despite only 3,152 homes sold in May, down 19.71 percent month over month and 48.86 percent year over year, homes under contract increased a substantial 114.86 percent from the previous month.
“We are living in an unprecedented time with safer-at-home orders to curtail the spread of the novel coronavirus and a nighttime curfew to diminish protests downtown,” stated Jill Schafer, Chair of the DMAR Market Trends Committee and Metro Denver REALTOR®. “It might seem like searching for a new home isn’t important, but no matter what else is going on in our world, there are still people who need to sell and people who need to buy. When the Denver metro area started opening up in May, those people, along with homebuyers who wanted to capitalize on record-low interest rates, generated a massive increase in the number of pending home contracts. While the infection rate curve flattened, the number of pending offers skyrocketed.”
According to Schafer, some of the surge in new listings can be attributed to sellers putting their homes back on the market after withdrawing them when showings were halted back in March.
There were 7,170 active listings at the end of May, 4.6 percent more than April but 19.36 percent less than the previous year when there were 8,891. 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 luxury home inventory and an abundance of condos for sale, with more than 25 months of inventory. Anything over six months is considered a buyer’s market.
As expected, the number of sold homes was down in May following the weeks of strict home-showing restrictions, dropping 19.71 percent month over month and 48.86 percent year over year. The average sold price of a home dropped slightly, back below $500,000 to $495,925. That was 1.24 percent lower than April but 2.43 percent higher year to date.
“The Memorial Day weekend is historically a slower time for real estate sales but the boost in homebuyer activity kept real estate agents busy this past holiday,” said Schafer. “Does this mean our market has recovered from COVID-19? Not quite yet, but it appears we are well on our way.” According to Schafer, low interest rates, renewed optimism and an increasing number of new choices are positively impacting the Denver-area housing market. She adds, “We are all hoping the virus and the violence stops soon. Will the downtown protests impact sales in that area? We have to wait and see.”
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999). In May 2020, 115 homes sold and closed for $1 million or greater, down 28.57 percent from April and 59.22 percent year over year. The closed dollar volume in the luxury segment in May was $174.4 million, down 24.43 percent from April and nearly 60 percent year over year.
“Times of uncertainty and volatility translate into real estate through many different lenses,” stated Andrew Abrams, member of the DMAR Market Trends Committee and Metro Denver REALTOR®. “At times, it can be difficult to remember the difference of how you are living, feeling and transacting today relative to a month ago. In residential real estate, this is exacerbated as the time it takes to close on a property normally does not reflect the market at the time of closing. This is why there is relative volatility in the stats depending on which lens you look through.”
In May, there were 569 new listings priced over $1 million on the market. That is up 116.35 percent compared to the previous month and up 16.6 percent from last year at this time. Pending contracts were notably up somewhat proportional to the active listings, up 145.6 percent compared to last month and up 8.87 percent compared to last year. This shows that supply and demand were staying relative to each other. Having said that, the number of homes sold last month was down drastically; reflecting that two months ago, demand had decreased substantially.
“The year-to-date data reflects two markets: pre-COVID-19 and COVID-19,” adds Abrams. There were 1,899 new listings year to date, which is consistent with last year. The last few months were slower stemming from the pandemic which reflects how hot the metro-Denver real estate market was at the beginning of the year. There have been 755 closed properties in the over $1 million price segment through May. Notably, the close price has decreased to 96.97 percent of the list price – reflecting the lowest ratio since 2016.
The highest-priced single-family home that sold in May was $4,500,000, representing six bedrooms, 10 bathrooms and 14,106 above ground square feet in Cherry Hills Village. The highest-priced condo sale was $1,800,000 representing three bedrooms, six bathrooms and 5,646 above ground square feet in Denver. The REALTORS® representing the buyers and sellers in both transactions are DMAR members.