The Denver Real Estate Market in April of 2021
Our local Denver real estate market continues to be a rollercoaster of emotions for both brokers and their home buyers. Even sellers, who seem to be holding all the cards, must carefully choose between offers or risk the deal falling through.
Let's start with some encouraging news. Total active listings at the end of April were up 35.03% month-over-month to 2,594 homes. Available detached, single-family homes saw a 46.17% increase, and inventory of attached homes jumped by 19.4%. This is actually the largest, March to April increase on record. The previous record increase was 22.2% in 2015.
And if you recall last month, inventory had decreased month-over-month by 5.09% and was the largest decrease of active listings on record. This is one wild market, folks.
Ultimately though, inventory is down drastically compared to the same time last year—and it's only half the story. Because buyer demand is still vastly outpacing supply, there's still a ton of fierce competition. Accordingly, days on market keep on falling (to just 10 days for detached homes) and prices are continuing to rise.
The average price for a detached, single-family home hit $699,039 in April. The previous month's average price was $674,990. But, prices in April only increased by 3.62% month-over-month. The price jump from February to March was 6.72%.
Still, buyers are moving forward thanks to continued low interest rates and the potential to earn significant equity right out of the gate.
When is the Housing Marketing Going to Crash?
Back in April, Google reported a 2,450% spike in this exact search question. And it's a valid question considering the rampant pace of the Denver real estate market, as well as just about the entire housing market across the United States.
However, economists within the industry are not calling this a bubble, nor predicting a crash. Here are five reasons why:
- As you read above, inventory is up month-over-month, but not year-over-year and not in the ballpark to keep up with buyer demand. This creates competition for what is available and in turn, drives up prices.
- Mortgage interest rates remain the lowest in decades, helping to offset increased prices. While they popped up to 3.248% in mid-March, as of today (May 6), it's back down to 2.872%. And while experts predict an increase by the end of the year, it's not likely to vastly affect home buying.
- Demographic trends are bringing more buyers to the market. Some buyers looking for bigger places and outdoor spaces due to the pandemic. And Millennials are hitting their prime, home-buying years. Plus, Denver was in the top five U.S. cities for growth in 2020 according to an analysis by Updater, a New York-based relocation services provider.
- New home builders can't keep up with demand either, possibly due to the current cost of lumber which hit a new high of $1,300 per thousand board feet. Last year, the same amount of lumber was just $328.50.
- Qualifying for a mortgage is tough these days. Your credit score needs to be stellar and lenders can and will scrutinize every aspect of your finances to ensure you're worthy of loan approval. In comparison, prior to the last crash, mortgages were handed out left and right, often regardless of income, credit score or down payment size.
To learn more about buying and selling in a low-inventory market (that's not headed for a crash), check out our previous blog discussing the state of the market, mortgage rates and the ability for buyers to earn equity now.
Looking to Buy or Sell a Home in Denver?
If you’re thinking about buying or selling right now, feel free to reach out to a PorchLight agent. They would love to guide you through the process from start to finish. Between their own expertise and collaborating with our team of 150+ brokers, they have all the connections needed to get you the best deal or the best offer.
For sellers, we offer a comprehensive Comparative Market Analysis (CMA) report. It looks at comparable homes (comps) that have recently sold, current market conditions, along with your home’s location, age, condition, size and other factors such as upgrades you've made since living there. If you want a clear picture of your value and equity, a proper CMA is your jumping-off point.
Are you a buyer looking for an advantage? Ask your PorchLight broker about our partnership with Homeward which offers financial programs that enable homebuyers to make cash offers, even before they sell their current home, or if they are buying without selling at all.
Until next month's Denver real estate blog post, best of luck and remember to real estate wisely with the help of PorchLight!
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