The real estate market picked up early for Denver this year, on par for another frenzied spring selling season. This is reflected in the stats from February, which show a 56% drop in median days on market from January and just 1.4 months of active inventory for detached homes. The looming question now is, what impact will the Coronavirus and other economic factors have on this early momentum and the Denver real estate market in general?
Rate Fluctuation
Our heads are still spinning from the mortgage rate fluctuations that happened this week. In case you missed it, rates have been at historic lows, prompting an influx of refinance applications that clogged the systemcausing several rate increases earlier this week. The Federal Reserve remedied the situation today with a drop back to 3.5%. Low rates are great for buyers out shopping in the Denver real estate market, but did you know they are also good for sellers? The increase in affordability that a low mortgage rate provides increases the pool of buyers that can afford a seller's home. More buyers means more interest and hopefully more offers for your Denver nest.
Inventory Still Low
The Denver real estate market is still starved for inventory with sustained demand from buyers throughout the month of February. With 5,083 homes going under contract last month and only 5,122 new homes to the market, it seems buyers aren't wasting their time when it comes to making strong offers and scooping up their dream homes.
Coronavirus and other Economic Factors
What remains to be seen is how the Coronavirus will impact the Denver real estate market. The recession talk of 2019 had largely subsided, but economists are starting to discuss it again amidst the pandemic that we are currently experiencing. Megan Aller of First American Title believes that, œWhile the media continues to churn information out about tension in the Middle East, the presidential election cycle, stock market noise and COVID-19, the Greater Metro Denver Market remains strong and shows signs of being well insulated. Denver does have the 3rd highest job market in the country and Colorado is in the top 10 for population growth which will continue to drive demand for housing stock. According to Nicole Rueth of Fairway Mortgage, œHousing will not be a contributing factor in any upcoming recession. In fact, a stable housing market could be the thing that carries us through the economic uncertainty.
Doing What We Can
For now, professionals in the Denver real estate market are taking necessary precautions which may include limiting open houses for occupied homes, waving instead of shaking hands, proper hand washing and sanitizing, keeping gloves and sanitizer on hand, practicing healthy social distancing, and of course removing oneself from all social situations in the event of a positive test for the virus. Title companies, builders, and vendors are implementing their own protocols as well for closings, showings, and inspections.
While the outbreak is too new to predict its overall impact on the economy or the housing market, itstill remains a good time to buy or sell in the Denver real estate market. For buyers, the low interest rates will continue to provide more purchasing power which will keep demand high for homes on the market.
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