A Look at Denver’s March Numbers
The real estate market is moving quickly in the Denver metro area. In March, the average days on market for detached homes dropped by 4 days to just 15 month-over-month.
That’s also down from 27 days on market for March of 2020, however, Colorado’s Covid-19 stay-at-home orders which went into effect on March 25th may have affected that figure.
As we’ve been seeing for a while now, in Denver and across the country, the driving force has been low inventory (for both attached and detached), down 66.47% year-over-year. Historically, we see a 7% increase in active residential listings just between February and March. However, this year’s decrease of 5.09% is the largest on record.
The inventory issue coupled with low interest rates is creating the perfect storm. The additional wild card has been Covid-related issues such as homeowners being wary of selling and opening their doors to potential buyers walking through their homes.
The outcome has been a lot of competition and big offers. The average sales price for detached homes actually jumped from $632,581 in February to $674,990 in March 2021—that’s well over $40k. This is also a $115,812 increase since March of last year. And while interest rates begin to creep up, things don’t show any sign of slowing down just yet.
Even new home builds can’t keep up with the demand. Many local builders have hundreds of buyers on their waitlists. This National Association of Home Builders has reported that builders are struggling with both the cost and availability of building materials. Their margins are so slim that some builders are deciding to rent instead of sell.
Should Buyers Buy Right Now?
While it's clear that you should sell if you've been considering it, the decision to buy might weigh more heavily on your mind.
As interest rates start to slowly tick back up, the economy begins to recover and more people are vaccinated, the questions on everyone’s mind are—is this a bubble and is now a good time to buy a home? In short, no to the first question and absolutely to the second.
Looking back at the bubble and subsequent real estate market crash in 2008, there were 25,516 available listings in Denver. As of March, we have only 1,921 listings. There’s just too much demand and not enough inventory for the market to suddenly bottom out. It’s more likely that things might start to even out with prices still going up but perhaps not at such an astronomical rate.
Now, why buy in a seller’s market? Buyers frustrated with losing bids are sticking with the hunt because they are also smart buyers. Here’s why.
Currently averaging around 3%, mortgage rates are low, and it’s unlikely that they’ll jump back up to the crazy highs of the past. That means buyers can afford more home for their money while possibly earning thousands in equity now. In fact, current year-over-year appreciation is 15.26% and month-over-month appreciation is 6.9%.
Take a look at our recent blog post to see how the numbers potentially work out for buyers.
There is a ton of news about price increases. And there are a ton of rumors about a housing bubble. The balance is found in working with a real estate professional who knows the market and individual neighborhoods like the back of their hand. One who will temper your emotions to ensure you get the best deal without overpaying or conceding too much to secure a home.
At PorchLight, we’re a local and independent brokerage that has seen this market rollercoaster all over the place. Our agents have the connections, network, partnerships and deep, local insight needed to help you navigate buying and selling safely and without regrets.
Please reach out to us and let us know how we can help you make smart real estate decisions.
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