The Denver Metro real estate market shows no signs of slowdown after a gigantic bounce back from the March/April shelter-in-place public health orders. Inventory levels remain a concern however, as single-family homes are at their lowest levels, likely ever-seen in the Denver market this time of year.
The month of June 2020 saw the most active real estate market in Denver’s history with 7,111 homes going under contract. This outpaces the previous high in May of 2015 at 5,618 (the year Denver saw the greatest level of appreciation.)
Concern for buyer sanity & sustainability persists however, as the number of new homes coming on the market remains very low.
The number of single-family homes listed for sale in June reached only 3,437 homes compared to the previous low for this time of year in June of 2015 at 4,375. 2019 saw 5,887 single-family homes listed for sale. Current inventory is so low compared to buyer activity, there are only 3 weeks of available single family homes.
The overall good news for sellers = appreciation. The average price of all homes in the Denver metro market reached an all-time high last week of $520,790, up from $486,780 just three weeks ago.
Interestingly, we saw the gap widen slightly in the total number of homes that sold at-or-above the original asking price, versus those that sold below the original asking price. While anecdotal at best, this slight reduction in price paid for homes relative to asking price is likely a result of a combination of the high-end market being much more active, but slightly more negotiable in the $1mm or more price range, and home owners in the $750,000 or less price range being just a little too aggressive in pricing their homes, requiring price reductions or accepting slightly lower offers.
Once again, with incredibly low inventory and interest rates as attractive as ever, home owners in the Denver real estate market are seeing the benefits of incredibly strong buyer activity through short term home value appreciation.
Is this a result of people having to stay at home over an extended period of time, now realizing they want to love where they live, and in many cases, now work? Maybe. If so, this activity level is not sustainable, rather a rebound effect. But, not a bubble.
With inventory so low, it will take a major shift in local and national economies and a total reversal in migration patterns to pierce the armor of the incredibly strong and resilient Denver real estate market.