It seems Denver will be in a seller’s market for quite some time according to last week’s numbers. A market in balance between buyer and seller is defined as 6 months of inventory and today we have 0.8 months. Our inventory cushion has been resilient through this time because we went into covid-19 with such a shortage of inventory. The year had already started off in the earliest and deepest seller’s market that we have seen, with low inventory and multiple offers, and was on track to be a record-breaking year. This market is substantially different than 2008-2012, we had no inventory cushion, which immediately threw us into a buyer’s market. Right now, our demand is higher than it was before covid, inventory is still the same and money is available to borrow at low rates.
Overall, the Denver real estate market is looking somewhat strong, but until we have consistent patterns in data reported, it is still too difficult to predict where we are headed or where we might land. In the meantime, we are watching the market and certain data closely each week, including the breakdown of different price points.
The information below compares pre-covid peak week, March 4-10, with May 13-19. You will also find data comparing the week of May 13-19 with the average of the past 7 years for that same week.
The following information is an average of all types of residential real estate in Denver and 7 surrounding counties, comparing May 13-19 to pre-covid peak of March 4-10:
- There were 20.4% more properties under contract in comparison to pre-covid peak and 15.6% more from the previous week of May 6-12.
- There were 1.9% more new listings in comparison to that same pre-covid week and 0.4% more from the previous week.
- We saw about 25,000 showings, which is still down by 11% from pre-covid but we were up by 22% from the previous week
- Today we only have 13% of the inventory needed at 6,350 units in inventory, to balance the market between buyer and seller. The market will not shift to a buyer’s market until we have 46,536 units on the market
Comparing the same market today (all residential real estate in the same 7 counties) May 13-19, against the last 7-year average:
- We have the same number of active units in total at about 6,500 today as we did over the past 7 years.
- We put 1783 under contract during this week, versus the 7-year average of 904. That’s a 97.3% increase! We might be playing catch up from the dam that has broken.
- The 7-year average usually has 1.6 months of inventory, yet we are at 0.8 months, which is down 50%.
- Days on market, median was 7 over the past seven years but during this week we were at 9 days. Up 28.6%.
- We saw price reductions in about 19.5% of listings over the past seven years during this time, now reductions are up to 24.5% of listings, but the amount reduced is lower. The average price reduction was 4.7% but is now 3.8%.
- The average home was $566,000 and is now $540,000. The average condo sale was $393,000 and is now $366,000.
- Attached single family median price was $328,546 and is now exactly $330,000 – basically the same.
The 3 Strike Rule. If a property strikes out on all 3 of the questions below, it may be time for the seller to consider a new marketing strategy, including a potential price reduction. For a buyer, if you know the numbers in the table below for a property you are looking at, it might give you some room for negotiation. Knowing we are in a seller’s market; this will more than likely only be the case if a property is truly priced incorrectly or if it’s not being marketed properly. These numbers change weekly and have been good to follow during this unprecedented time, in hopes we can eventually have enough consistent data to give us an idea of how the market is standing up and where it might be going.
Remember, we need 46,536 units on the market before it balances between the buyer and seller and before there is any chance it flips to a buyer’s market, and today we only have 6,350 units in inventory.
*Data was gathered and supplied by Megan Aller with First American Title. Reports available upon request.