Barry Kunselman | 303.887.0588 | Contact Barry
RECORD-BREAKING DECEMBER 2020 DENVER HOME SALES
2020 is behind us and new opportunities await in 2021. No matter what happens we know a couple of things to be true. People want to live in Colorado, and real estate is a good place to invest.
How did the housing market perform in December 2020? REcolorado market statistics reveal a strong buying and selling season despite the pandemic. 5,113 homes closed, more than any other December on record. Sellers brought 3,017 New Listings of homes for sale to the market, 18% more than last December. Strong demand kept home prices high.
YEAR-END REVIEW
2020 was record-breaking for the Denver Metro housing market. According to REColorado, brokers wrote more contracts on listings and more homes sold than any other year on record. The number of New Listings sellers brought to the market could not keep pace with demand, which pushed down inventory levels. Prices reached all-time highs and half of all homes spent a week or less in the MLS. Sales of homes priced above $2 million were up nearly 60 percent annually.
While the numbers listed above represent the market, it may feel differently depending on which part of the city you are in. I'd be happy to compile the neighborhoods you're interested in learning about and email the numbers to you. Accompanying the statistics for each specific neighborhood is a detailed description of the area so you can see if that neighborhood sounds right for you. Let me know which neighborhoods you'd like and I'll gladly send them to you right away.
WHAT CAN WE EXPECT IN 2020?
We all know that COVID has caused a seismic shift in our economy and the way we do business. Couple that with a new presidential administration, what does that mean for real estate in the coming years?
STRONG REAL ESTATE MARKET
Denver’s strong economy and favorable demographic trends seem to be the primary drivers of the local market for 2021.
- Eighty percent of the jobs that were lost due to the pandemic have already been recovered in the Denver metro area.
- Millennials make up about 30 percent of Denver’s population. This is a very promising indicator for the local real estate market since Millennials also represent the largest group of homebuyers. Given the job market and quality of life, these Millennials stay in the area to raise families, generating more demand for the Denver housing market.
- With more employees everywhere untethered from a traditional office environment we expect to see a continued flow of in-migration to the state. Most of the people moving to the Denver area came from Jefferson City in Georgia and Chicago in Illinois. Denver also attracted many professionals from both New York and San Francisco during the pandemic, according to LinkedIn.
Expect the strong momentum in the real estate market to continue with existing home sales growing by nearly 10 percent in 2021. Prices are up, but good opportunities are still out there.
LOW MORTGAGE RATES
- Mortgage rates have stabilized below 2.9 percent for the last three months, boosting homebuying activity. Rates won’t hike higher than 3.1 percent in 2021.
- The ultra-low mortgage rates decrease borrowing costs significantly. In fact, housing in the Denver area is still more affordable now than a year earlier although home prices rose 14 percent.
This winter will likely be one of the best ever for the area boosting home sales activity by more than 10 percent in 2021. Thus, expect Denver’s housing market to outperform compared to nationwide.
What’s next for 2021? Expect a persistent housing shortage that will keep home prices elevated, while home sales will continue to rise as record-low mortgage rates and teleworking give housing markets a boost.
This will definitely be a busy year.
DENVER Homebuyers
The road to homeownership may be a bumpy one - especially given the current low inventory levels. Supply is expected to rise modestly based on the slightly higher number of building permits of single-family homes compared to a year earlier in the Denver metro area. Homebuilders report labor shortage as one of the main constraints of housing construction.
CHANGING BUYER PREFERENCES
- During the pandemic, homebuyers’ preferences have changed. They are seeking out features that are associated with luxury homes, like spacious yards, home offices, gyms, and private swimming pools. In the meantime, metropolitan markets like Denver, with such proximity to the resort areas, are in high demand.
Is it a good time to sell?
There isn’t enough inventory to keep up with high demand in the Denver area. There was a limited inventory before the pandemic; it is even more limited now. In fact, we have been under-producing for the past decade. In November, the inventory of existing single-family homes for sale dropped by nearly 70 percent from a year earlier. With homes selling in less than a month, home prices are hitting warp speeds eroding affordability. Expect home prices to rise more than 5 percent, which is the national forecast for 2021.
GET IN TOUCH
It's my job to help you and all of my clients make smart housing decisions. The stats are a phenomenal indicator of the market, but they're just the start. I'm happy to share my expertise to tell you the stories behind the numbers.
If you need to discuss the numbers above please don't hesitate to call/text 303.887.0588 or email me at barry@porchlightgroup.com!
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