Monday, July 20, 2020

June 2020: Most Pendings in Denver HISTORY (!?)

Metro Denver hit an all-time record in June: highest number of homes that went under-contract EVER, with 7,676 homes/townhomes/condos that went pending in June. That is 27% more than June 2019, and the most in any month in Denver HISTORY! I'm seeing this first-hand as I've been in constant bid-wars for buyers and receiving multiple competing offers for sellers, all $15,000 to $30,000 over asking-price! It's a ruthless shark-frenzy out there, but fortunately I've been able to make my buyers the winning offer, and get my sellers extremely high offers and excellent terms for their homes. One of my listings had 12 extremely strong offers in less than 30 hours! This is actually not a seller's market: it is hyper-seller's market. 

What is causing this HUGE demand for housing
in an unstable economy?
I think one of the main reasons for this huge demand in housing is the experience of the quarantine. Families and roommates are much more aware of the need for the security of a home during things like a global pandemic, and the necessity and functionality of different spaces in a post-COVID world: spaces where kids can play or do school work, offices where adults can actually work in peace (which aren't the master bedroom...or bathroom lol!), basements which can provide a whole other recreational flex space, backyards to be able to get out of the house, garden, and enjoy sunsets and cooler evenings. The psychology of a home and our understanding of it is returning back to its original value and essentiality: it is so much more than a place to store your stuff and sleep, or be "tiny": it is your safe place where much of life actually happens.

A few other interesting stats:
  • There were 57% more closings in June than May (COVID-induced lull for May)
  • There is half a month of inventory from $200k to $500k which is about as scarce as it gets in real estate. There is 1 month of inventory from $500k to $750,000.  $750k-$1MM has 2 months of inventory (still a hot seller's market), and $1MM+ has 4.3 months of inventory, which actually represents a "balanced market."
  • The averaged closed price was 2% higher than June 2019 at $509,736
  • The average number of active listings from 1985 to 2019 was 16,376. There were 6,383 active listings at the end of June.
  • 2,427 homes went pending in the last 7 days. There are currently 8,237 homes under contract. June's all-time record may be broken by July. 
  • There are only 5,573 active homes for sale right now.
  • Interest rates are at 3.125% today for a 30-year loan! 
Who is this market good for: renters to get in at lowest interest rates in history, and sellers to upgrade from small home to bigger home, realize serious equity, and have a similar monthly payment on the bigger home because of their equity and low interest rates.