Denver Housing Market Update
The incredible pace of Denver Metro's housing market is enough to make anyone's head spin. Homes are selling on average 41 percent faster than this time last year, according to DMAR's latest report. DMAR states that "with median days in the MLS at five, close-price-to-list-price ratio 101.90 percent, and months of inventory at 0.55, competition remains incredibly high."
"With median days in the MLS at five, close-price-to- list-price ratio 101.90 percent, and months of inventory at 0.55, competition remains incredibly high." - DMAR
And all this competition inevitably causes prices to rise. The average close price of all homes (attached and detached) in February 2021 was $553,774 up 19.44 percent from February 2020. The average close price of single-family detached homes alone jumped an even higher 23.15 percent to a record-setting $632,581 (DMAR).
And it's not just Denver's market that is feeling the pressure. According to CNBC, "Well over half of all buyers, 56%, faced bidding wars on their offers in January, according to a Redfin survey. That is up from 52% in December. More than half of homes are now going under contract in less than two weeks....Competition is fierce across the nation, but worst in Salt Lake City, where 9 out of 10 offers faced competition, according to Redfin’s survey of 24 major markets. It was followed by San Diego (78.9%), the Bay Area (77.1%), Denver (73.9%) and Seattle (73.8%)."
Let me repeat that statistic: 73.9 percent of homes in Denver had multiple offers in January 2021! Buyers that go into the process expecting to face competition will be able to handle the challenges of bidding wars (think having to overbid, see properties the same day they hit the market, and doing your best to write a stand out offer). Fully understanding the contract before you start submitting offers will help you anticipate how the process is going to go - your Usaj Broker will explain all the details to you! From appraisal gaps to escalation clauses to earnest money, they will educate you on our options.
So where is the silver lining in this market madness for home buyers?
- Increased access to vaccinations may encourage sellers who have been sitting on the fence during the pandemic.
- Mortgage rates actually rose in February, which if they continue to do so, may discourage new buyers from getting into the market -- adding to the increase of supply. If you are currently house hunting, make sure you speak with your lender about what rising rates mean for you.
- As we head into warmer months, an increased number of sellers traditionally tend to list their homes starting in March (although nothing about the past 365 days has followed market trends).
- The downtown condo market is still a buyer's market, but this will not likely last for long as we saw an increase in the demand for condos overall last month.
- Work with a Usaj Realty broker as they work incredibly hard to make sure your offers are extremely competitive and do their best to take the stress off your shoulders by being creative, thoughtful, and communicative
- With a Usaj Broker advocating for you, right from the beginning we will explain the importance of what getting into a multiple offer situation means and prepping you for what to expect.
- There arguably has never been a more prudent time to work with a great lender to help you through the home buying process.
- Contact us to learn more! Info@usajrealty.com or call 720.398.2999
A Quick Glance at the Numbers:
|Avg. Days on Market||
Avg. Sold Price: Single Family Home
|Avg. Sold Price: Condo||# of Homes Active||# of Homes Sold||# of Homes Pending||
Avg. Sold Price Change YOY
+ 7.8 %
+ 12.53 %
+ 0.66 %
+ 5.04 %
+ 19.44 %
During these unprecedented times, Usaj Realty would love to carefully assist you with finding your next place to call home, or selling your current property. Our acumen, attention to the market and negotiation skills will all go to work in order to advocate for your goals. Email us at firstname.lastname@example.org or call 720.398.2999. We measure our success by the happiness of our clients!
Headlines: What's Happening in Colorado
Millennials struggle to become first-time homebuyers in Colorado
"There is new research out highlighting the struggle many millennials in Colorado are facing when it comes to becoming first-time home buyers. The challenge is even greater for millennials in cities like Denver, where there are fewer homes available. Last month, the inventory of available homes for sale was only 213. That’s down -70% from January, 2020."
Metro Denver's crazy housing market is likely to stay, 'hot hot hot!'
"Supply still can’t keep up with demand in the metro Denver housing market. New numbers from the Denver Metro Association of Realtors (DMAR) show the average home sold in just five days in January. Denver was second only to Tacoma, Wash., according to Redfin."
Headlines: What's Happening Nationally
Bidding wars are off the charts, as home listings fall to a record low
"Well over half of all buyers, 56%, are facing bidding wars in their offers, according to a Redfin survey in January. That is up from 52% in December."
Pending home sales drop, but there’s a silver lining
"For the fifth consecutive month, U.S. pending home sales dipped – this time, down 2.8% in January from December, according to a report from the National Association of Realtors. And inventory shortages are the culprit.
Despite the decline, many industry observers see big potential for the housing market in the year ahead.
It’s no secret that low mortgage rates and societal shifts brought on by COVID-19 have collided to form a red-hot housing market. But many would-be buyers have also been thwarted by comically low resale inventory, as well as supply chain constraints and escalating materials costs that have made life difficult for homebuilders. January was illustrative."
Mortgage rate forecast for March 2021: Upward pressure predicted
“Mortgage rates will be higher in March. The prospect for economic recovery is strengthening and thereby lessening the hold on safe U.S. Treasury yields,” he [Lawrence Yun, chief economist for the National Association of Realtors in Washington, D.C.] says. “In addition, more stimulus and the accompanying higher national debt will place upward pressure on inflation. Consequently, long-term interest rates, including the benchmark 30-year fixed rate, will be rising.”
Yun envisions that benchmark rate averaging 3 percent in March before creeping up to 3.2 percent by summer and hitting 3.5 percent a year from now.
10 million Americans behind on mortgage payments
"Ten million Americans are behind on their mortgage payments, with the majority of these late payments occurring through FHA loans. The White House said it would extend a ban on home foreclosures for federally backed mortgages through June 30."
Report for February 2021:
Read Denver Metro Association of Realtor's full report on last month's Real Estate trends and statistics in Denver here.
And as always, please let us know if you have any questions!
Whether buying or selling, Usaj Realty is dedicated to helping you stay competitive. Your Usaj Realty broker will communicate effectively, learn your goals like the back of their hand, and work closely with you to negotiate the best terms possible, and expertly manage your transaction from start to finish, ensuring peace of mind.
Email us at email@example.com or call 720.398.2999.
Posted by Jennifer Black
Jennifer Black champions all of Usaj Realty’s marketing publications. With a passion for digital marketing, graphic design, writing, and all things creative, Jennifer excels in the office as a crucial support staff member for our brokers and management Originally from Redwood City, California, Jennifer pioneered her way to Denver and began working for Usaj Realty in May of 2014. She loves every minute of life in Denver, which is directly enhanced by her time designing for Usaj Realty. Away from work, Jennifer enjoys escaping to the great outdoors, going skiing, hiking, and exploring local breweries and restaurants.Facebook LinkedIn Twitter