The meaning and feeling of home has become exponentially more important in 2020, as Denver residents were asked to œstay-at-home to help stop the spread of Covid-19 this spring. Mudrooms were converted to home offices, kitchen tables turned into schoolhouses, and outdoor areas became coveted relaxation space. All the while, Denver buyers and sellers, in tandem with the entire real estate industry, adapted quickly to advance their home dreams despite the circumstances.
Expected drop in volume & appreciation for May
Even though several determined buyers and sellers were able to view, come to terms, and close on their homes, still many chose to hold off as restrictions grew tighter and nearly brought the industry to a complete halt for half of the month of April. As predicted, because less homes went under contract in April, less homes closed in May. The number of sales for this May was down almost 50% from May of 2019. Appreciation also took a small hit for the first time in years, down 1.3% from May of last year. The Denver real estate market typically sees all of its yearly appreciation in the spring, but the timing of the pandemicdisrupted that seasonality this year.
Economic Indicators
There are a myriad of economic factors that affect the Denver real estate market, all of which seem to be headed in a positive direction, with some good news both nationally and locally that we're pleased to share:
- Denver was listed as one of the cities best positioned to recover from the Coronavirus pandemic in a recent study by Moody analytics.
- Unemployment seems to be trending back down with a gain of 2.5 million jobs in May.
- The stock market is recovering, having gained back it's 2020 losses by the beginning of June.
- Some economists are suggesting that the recession is already over, albeit with a very slow and steady road to full recovery that is industry dependent.
- Interest rates for home mortgages remain historically low, hovering around 3%,increasing purchasing power for Denver buyers.
Where will we go from here?
In addition to the anecdotal market experience that we're hearing from our Live Urban agents, like multiple offer situations and homesgoing under contract quickly, all leading data indicators demonstrate resilience for the Denver real estate market. Showings continue to trend upwards despite ongoing showing restrictions, and the number of units put under contract in May was up 14.4% from last May. Those units will close in June and be part of next month's market report, so check back in July for the full story. Megan Aller, data queen at First American Title, predicts that the total number of closed transactions could be caught up to last year by mid July, followed by the natural cooling off that we're accustomed to for the rest of the summer. We're also expecting inventory to rise as more sellers get comfortable listing their homes, giving buyers more choices as they shop for their first home, dream home, or home upgrade.
We have been keeping our agents up-to-date with market data, guidelines for listing and showing property during the pandemic, and virtual solutions to help connect withclients and showcase properties. Contact your Live Urban agent or find one that you vibe with here to continue learning about the Denver real estate market, learn how to buy and sell during a pandemic, and get all of your questions answered by a localexpert!
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