Denver Real Estate Market Update & Coranavirus Impact, March 2020

denver real estate stats

Metro Denver Real Estate Statistics (single family)

 February 2020January 2020February 2019 (last year)
Median Sold Price$450,000$443,000$419,900
# of Active Listings4,9255,1365,969
# Under Contract4,6843,4784,571
# Sold Homes3,2292,9323,126
Months Supply of Homes1.11.11.4
Average Days on Market414845

Covid-19 Impact on Denver Real Estate

How will the Coronavirus affect the Denver Real Estate market?  Here are my predictions:
1.  The housing market is going to slow down for a little bit.  You can’t have the huge layoffs in the travel, hospitality and restaurant industries and expect it not to have an impact.  More immediately, due to the coronavirus, some sellers won’t want people coming in and out of their houses and spreading germs while some buyers will decide to postpone their house hunting. 
2.  The housing market is not going to crash. Why not? The big reason is that there is a chronic shortage of new housing being built compared to population growth. The rental market is super strong which proves the underlying housing demand.
3.  When the coronavirus has subsided and things start to get back to normal, there will be a huge influx of new listings and new buyers.  I think we will have a record number of homes sell in May, June and July this year.

Pricing

The median sold price of houses closed in February went up from $443,000 in January to $450,000.  This is the same price we saw at the peak of the market last year. I don’t think the Coronavirus will impact pricing because while there may be fewer buyers right now, there will also be fewer new listing coming on the market.  I expect prices to continue to rise, although maybe at a slower pace until covid-19 has passed. 

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Volume

While the number of new listings was up February, we saw another drop in the number of active listings in The Denver MLS from January to February and had our lowest inventory in the Denver MLS since February 2018. This means that there were more new buyers than new sellers in February.  The number of homes that closed in February 2020 (3,229) rose slightly from January (2,932).  I expect the number of closing to follow our yearly trend and sharply increase for March because 4,684 houses were under contract at the end of February, before the coronavirus impacted our daily lives in Denver.  April numbers will probably still rise, but not as dramatically as we typically see during that time of the year.  More homes closed in February of this year than any of the three previous years in February.  The average days on market dropped pretty significantly from 48 days in January to 41 in February.

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Interest Rates

Today’s Most Prevalent National Rates as reported by Bankrate.com.
Mortgage rates are higher than expected right now for a few reasons.  One being that market factors have caused a surge in refinance applications, which has exceeded lenders’ capacity levels and therefore temporarily impacted rates.  Here is a great article on other theories about why mortgage rates went up while interest rates went down: https://www.dailynews.com/2020/03/12/coronavirus-fallout-cut-interest-rates-so-why-did-mortgages-get-pricier/

  • 30 YEAR FIXED – up from 3.68% on February 25th to 4.12%
  • FHA/VA – up from 3.44% to 4%
  • 15 YEAR FIXED – up from 3.17% to 3.35%
  • 5 YEAR ARMS – down from 3.65% to 3.51%

The Bottom Line

The coronavirus or Covid-19 will slow the market down, but all signs show that the Metro Denver real estate market is still in the midst of an 8 year upward trend.  I expect the later part of spring will be one of our busiest years ever due to the virus slowing down our early spring market.  Our year over year prices continue to rise faster than inflation and the number of homes sold each year continues to break records.  The median sold price for single family homes in February 2020 ($450,000) was about $30,000 or 7.2% higher than the median sold price in February of last year and more than double of sold prices a decade ago in February 2010 ($220,000). 

The coronavirus certainly leaves us with question marks regarding the short term future of the real estate market.  I expect prices to continue to rise until we hit our peak which may be later than our typical seasonal peak of June and inventory should also rise until we see the high point in August or September.  

If you are considering selling, there are still buyers looking and now might be a good time to avoid more competition.  If you would like an accurate estimate of how much your home should sell for, contact me for a free, no obligation in-home consultation or learn more about my low commission listings.

If you are considering buying, take advantage of my cash back buying program to help to pay for your closing costs! My preferred lender also has a great no money down program with no mortgage insurance.

If you know of anybody thinking about becoming a buyer or a seller, remember, I am never too busy for your referrals. Help your friends save thousands with my low commission listings and home buyer rebate programs.

Fair Fee Realtor, Nathan Hart

Fair Fee Realtor, Nathan Hart

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