Despite the events of 2020, buying a home in the Denver metro area remains a stableinvestment, as appreciation rates continue to surge and low interest rates boost affordability. This time of year we're accustomed to a slight retraction in prices, however year-over-year growth for single family homes came in at a shocking 18% for October! Attached homes appreciated at a more modest, but still favorable, 7.86%.
Timing Your Denver Home Sale
Many sellers ask about œtiming the market and to that we say, the time is now! The seller's market in Denver continues to grow stronger due to a deep buyer pool and shallow inventory. The œodds of selling have never been higher. This metric indicates the likelihood that your home will go under contract or close within 30 days of listing and it reached an all time high of 78% in October! Prior to this year, the record high was 61%. This year, we've averaged about 40% fewer listings each month than normal, but we expect inventory to rise a bit in the spring. If you've got a home to sell and don't want to compete with other listings, the Denver real estate market has eager buyers waiting to make your home their own before the new year! Megan Aller of First American Title has discovered another data trend that can help you time your home sale: Homes listed in the first week of the month spend less days on market, so aiming for that week could boost your odds of selling even higher.
Buyer Opportunities in the Denver real estate market
While Denver home prices continue to rise, interest rates continue to drop, reaching a new low for the twelfth time this year in October, which helps to offset the appreciation by increasing affordability. Colorado also has the third lowest property tax rate in the country, which works in buyers' favor to attribute more of the mortgage payment to principal and interest. That doesn't mean it's easy for buyers in the Denver real estate market right now though. With little to choose from and increased competition for desirable homes, buyers need to get creative with their offers, be prepared to offer over asking price, and act quickly when the right home becomes available. Micro-market opportunities do exist where supply outweighs demand, like in Lodo, where buyers have more negotiating power due to higher prices, new home inventory, and congestion concerns with the ongoing pandemic. The holidays are also approaching which may distract some buyer competition. If you're serious about buying a home this year, holiday weekends present the best opportunity, so don't pump the brakes on your home search. You may just beat the competition and move into your new home by the new year!
Predicting Market Trends in the Denver real estate market
All metrics are trending up in the Denver real estate market right now, but we are closely monitoring the leading edge indicators for changes in the market and will continue to keep you informed each month. Events that would signal a potential shift include...
- A significant drop in showing activity
- A change in the rate of pending sales
- Price reductions
- Increase in days on market (accounting for seasonal norms)
- Large increase in active inventory
As long as inventory remains low and interest remains high, prices will continue to climb in the Denver metro area. Affordability is what's keeping buyer demand high and as long as mortgage rates remain favorable, buyers will remain dedicated. Could the election and the rising number of Covid cases impact the stats for November? Check back next month to find out!
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Mortgage Rates & Home Affordability
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