The holiday season is upon us, although this year will have a different vibe than we're used to, with Covid restrictions in place to protect our loved ones and our community. The Denver real estate market also feels different this year. The seasonal trends that we're accustomed tohave not applied in 2020 and records have been broken nearly every month.Homes typically sit on the market a bit longer in November and we tend see a slight retraction in prices as we close out the year, but not this year! November showed a 15.5% year-over-year appreciation for detached homes and a median of just five days on market despite election and holiday distractions. By comparison, last year we reported a 7% year-over-year increase for November.
Denver's Inventory Crisis
At the end of November, we were left with just 3,415 active listings for the entire metro area as compared to nearly 7,000 at the same time in 2019. That's 51% less than last year and 29% less than we closed out the month of October this year, translating to under two weeks of inventory for single family homes and growing frustration for area homebuyers. This is in part due to low interest rates that are keeping buyer demand at an all-time high, but also due to homeowners that are hesitantto list. In the early 2000's, 15% of the population moved every year. Pre-pandemic, that number was down to 9.8% and while we don't have a current stat, we do know that many Denver residents are choosing not to sell due to a myriad of factors which may include Covid-19 fears, recently refinancing for a lower monthly payment, hanging on to their home as an investment with a great rate, or fear that they won't be able to find a replacement home with the current lack of available homes on the market. It seems that the Denver real estate market is set up for continued gridlock in 2021.
New Home Sales
New home builders have a critical role to play in helping toalleviate the inventory crisis in Denver.Increased competition in the resale market is driving buyers to new home developments, for which pending contracts are awarded to the first to sign instead of the highest bidder. It's no wonder that new homes sales are up 60% nationwide. Builders are working tirelessly against labor shortages and increased cost of supply to keep up with demand and deliver products as timely as possible for eager buyers. If you're having trouble finding your dream home or are growing weary of the competition, new builds are a great alternative and also offer improved air quality and energy efficiency!
Covid-19 and Denver real estate
With such high demand for homes in the Denver metro area, we are relieved that real estate remains an essential business within the new œdial system for the state of Colorado and that we are able to continue assisting our buyers and sellers. The new guidelines for œlevel red real estate activities include donning masks and gloves while viewing a home, a max of four people allowed at a showing or inspection including agents and professionals, and just one household permitted (parties to the contract only) for open houses.
Shorter days, holidays, Covid-19 restrictions, and limited inventory all present challenges for buyers and sellers in the Denver real estate market this month. Check back next month to see how the numbers shake out for December and the trajectory the Denver real estate market is on for 2021.
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