Denver’s Real Estate Market – April 2020

The results for Denver’s real estate market for April 2020 have finally been published! COVID-19 left us with many many questions. April felt like it moved at a sloths pace building anticipation, perhaps even anxiety, as the days ticked away. The world was forced to wait and see for the first tangible results to compile. April was the first month that the United States would generate a full months report on the direct affects COVID-19 had upon the economy. With that being said, here are the results of metro Denver’s Real Estate Market.

The information below is directly sourced from ReColorado. ReColorado is a multiple listing service that I am a member of. Please remember this information is specifically for metro Denver, CO.

 

Denver Housing Market Statistics

Homes Closed

In the Denver Metro Area this April, 3,855 homes closed, a year-over-year decrease of 26%. As compared to last month, sales saw a 19% decrease.

In April, the count of listings in Pending status was 3,318, which is 28% less than last month and down 45%, from April 2019.

Homes Closed Year-Over-Year Change

April 2019 — 5,205
April 2020 — 3,855
-26%

Prices

In April, the average price of a home in the Denver metro area was $502,207, a year-over-year increase of 1%, but down 2% from last month.

Single-family residences sold for an average price of $549,306, down less than 1% year over year. The price of multi-family/ condos/townhomes was up 3% from April 2019, at an average of $378,499.

Average Closed Prices Year-Over-Year Change

April 2019 — $495,706
April 2020 — $502,207
+1%

New Listings

Throughout the month, sellers brought 4,843 new listings to the market, down 26% compared to last year, and a 28% decrease from last month.

The count of active listings of homes for sale at the end of April was 6,663, 15% lower than last year but 5% higher than the end of last month.

We currently have 7 weeks of inventory, one week more than last month and unchanged from last year.

New Listings Year-Over-Year Change

April 2019 — 7,527
April 2020 — 4,843
-26%

Days in MLS

In April, homes spent an average of 20 days on the market, 9 days less than this time last year, and 10 days less than last month. On average, single-family residences were on the market 19 days, while multi-family/condos/townhomes were on the market 23 days.

The median number of days a home spent on the market in April was 5, 3 days less than this time last year.

Days on Market Year-Over-Year Change

April 2019 — 29
April 2020 — 20
– 9 days

Year to Date

Year-to-date data for Listings Closed and New Listings shows the market has pulled back a bit amid the uncertainty surrounding the coronavirus. The count for closed listings is 2% lower than last year’s year-to-date figures and the average price of those listings is up 4%. The number of new listings that came on the market is down 9%. On average, homes spent one day less on the market as they did at this point in 2019.

 

Denver’s Real Estate Market – Data Interpreted

Pending Listings

• 
  “In April, the count of listings in Pending status was 3,318, which is 28% less than last month and down 45%, from April 2019.”

Close to half the number of buyers in April 2019’s market were not apart of April 2020’s market and nearly a third of the total number of buyers that were in the market during March 2020 dropped within a month. We can infer this is due to several reasons:

• • • Uncertainty
    • Unemployment
    • Tightened borrower requirements

It is important to keep your eye on this statistic moving forward because this is an indicator of the market shifting from a seller’s market to a buyer’s market or vice versa.

 

New Listings

• “Throughout the month, sellers brought 4,843 new listings to the market, down 26% compared to last year, and a 28% decrease from last month.”

The same number of buyers that dropped out of the market from March to April 2020 is interestingly the same number of sellers listing their homes on the market. Denver metro’s housing inventory decreased by about a quarter compared to the amount of inventory on the market in April 2019. This decrease in inventory was expected largely due to market uncertainty, health risks associated with selling, and the stay-at-home order banning showings and open houses.

 

Average Sold Price

• “In April, the average price of a home in the Denver metro area was $502,207, a year-over-year increase of 1%, but down 2% from last month.”

Broadly speaking, Realtors in Colorado largely agree that the state as a whole can expect to see a plateau in home sales prices. The good news is Colorado remains to be one of the most desirable states to move to and had a strong economy before COVID-19. However, the areas that will most likely see house prices affected and the inventory levels rise are those communities predominately supported by hospitality, oil and gas, and commercial spaces.

 

Denver’s Real Estate Market – Key Takeaways

It was expected to see significant disruption to not just Denver’s real estate market but really nationally. Locally though, Denver’s real estate market shift does provide key insights. The drop in the number of closed transactions, new listings, and active buyers did meet expectations. However, Denver’s real estate market is still a seller’s market but it did take a stunning hit.

Inventory did increase by a week in comparison to March 2020 but remains the same – 7 weeks of inventory – in comparison to April 2019. The typical real estate season really starts to ramp up March to April so this is normal to see in general, but honestly intriguing against the backdrop of COVID-19.

Overall, the real estate market for Denver saw it’s first significant shift since the 2008 Great Recession. April reflected a hit to the once unrelenting seller’s market tempering annual appreciation rates.

However, COVID-19 created unique challenges for the buyer’s market minimizing the number of overall buyers. This is why we saw an equal rate of decrease in active buyers and sellers for the month of April. It is important to continue to factor in the yo-yoing effect COVID-19 will continue to have upon all real estate markets. The anticipation of the next wave of COVID-19 cases and economic reaction remains to impact decisions now.

 

Denver’s Real Estate Market – What’s to Come?

Next month I expect to see a significant rise in inventory. Sellers will try to take advantage of a seller’s market while they can. The number of buyers will most likely stay close to the same amount April had or continue to decrease in response to the mortgage industry’s tightened lending requirements. Overall, we will see the real estate market supported by those who truly have to buy and/or sell or who are financially positioned to find investment deals within the rental market such as multi-family dwelling units.

~ Shelby Hoover, Realtor