If April showers bring May flowers, then what do May showers bring? This year, they brought extreme price growth for both attached and detached homes. The average price for a single family home in the Denver Metro area has reached a new high of $700,559, a 29.25% increase from one year ago! Attached home prices in Denver are also way up (22% year-over-year) and competition has been rising in the luxury market all spring, making it an extreme seller's market at all price points and for all home types in Denver. There's never been a better time to sell your home!
A Look Back at One Year Ago
While these extreme numbers are being compared to last May when we were just resurfacing from quarantine, it's still an incredible increase and a remarkable boost of equity for area homeowners. Surprisingly, the Denver real estate market didn't take a huge hit during the pandemic. Last June we reported just a 2% drop in year-over-year prices for single family homes, the lowest that number got during the pandemic and the only month that it went negative. The Denver real estate market remained strong even with extreme restrictions in place last April and quickly rebounded once stay-at-home orders lifted. August of 2020 began the double digit appreciation cycle that we're still experiencing today.
Other Notable Stats for May
The rainfall in May didn't stop Denver area buyers from viewing homes and doing what it takes to get them under contract. In fact, the Denver Real Estate Market had the lowest active inventory ever, down 20% from last month's already low count. The total number of closings is actually up 19% year-to-date even though we've had 4% less total listings this year, leaving us with that declining active inventory count month after month. Median days on market has been holding at just 4 days to contract for 18 consecutive weeks, indicating the speed and unrelenting voracity of the market.
Extended selling season or back to seasonal norms?
Will we return to seasonal norms this year or will these extreme circumstances stick around for an extended summer of selling? Traditionally we see all of our appreciation in the first half of the year, then a slight retraction of prices in the latter half of the year starting in the summer months when there tends to be more inventory and buyers are distracted with outdoor activities. Things typically begin to cool around Memorial Day and come to a more exaggerated slowdown after the Fourth of July. July is when we start to see more price reductions and longer days on market.
Interest rates are still too good to be true which could keep buyers on the hunt, but the world is also starting to reopen post-Covid which may distract buyers with vacations, concerts, and gatherings. Many sellers also prefer to sell in the summer, so we're hoping to see more inventory hit the market in the next few months which could temper the extremes we've been seeing. Time will tell if this will lead us back to our normal seasonal cadence and more sustainable appreciation rates,or if the buyer demand will remain strong and create a new normal for the Denver real estate market.
Many in the workforce will be back in the office soon, kids will be back in school this fall, and the city is beginning to thrive and bustle once again. Check back next month to see how this all plays into the numbers for June.
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