What a year — and that’s just in reference to the Denver real estate market!
Imagine you were flying at 45,000 feet, staring down at a hurricane, with its eye directly over downtown Denver and winds stretching across the Front Range. I know this sounds like a strange analogy for real estate (especially since we don’t have hurricanes in Denver), but bear with me since I majored in aeronautical science and minored in meteorology (think, former professional pilot and weather nerd, turned real estate pro). Back to the hurricane… the wind represents the fast-paced, single-family home market where homes have been selling in days (sometimes hours), prices are skyrocketing, and buyers are frustrated. Then, look over to downtown Denver — where the condo market isn’t fast and furious. Just like the eye of a hurricane, it’s relatively calm and clear. Those who’ve been following the condo market in downtown Denver can understand — it’s been very slow and experienced a price correction in the pandemic.
Alright, enough analogies. On to the stats!
Days on the Market
We started 202o off strong, in the 40-45 average days on market (DOM) range. Then, well… you know. After the pandemic started gaining momentum, inventory started to shrink and buyers that were committed to buying saw it through. The buying frenzy that followed pushed the average DOM down to the mid-twenties for the remainder of the summer, and into the fall.
The initial decline of inventory that started in January leveled off, then inventory began to jump in mid-late March when the stay-at-home orders hit.
In fact, it peaked all the way up to 3 months, a level we haven’t really seen since 2013! What was interesting to watch (statistically) in the midst of the media’s doom and gloom, was what happened as-stay-at home orders began to ease. As soon as Governor Polis deemed the real estate transaction an essential service, inventory began to plummet, eventually dipping lower than one by year-end. Yes, less than one month of inventory!
Everyone with access to the internet or news knows what I’m about to say. This year saw historically low interest rates. When I say historically low, I mean the national average was 3.11%! It has never been lower (since at least 1972, the first full year Freddie Mac started tracking interest rates).
Median Sales Price
Most reports on the median sale price for homes show it as an aggregate for the entire Front Range. That’s a great number to compare to other metro areas, but it’s not super helpful in gauging the local markets. Not to fear, we’ve got you covered (and next month we’ll be sharing neighborhood specific stats with you… stay tuned).
Over the last 12 years, the median sales price in Denver has risen every year for detached (single-family) homes, and all but one year for attached (condos, townhomes, etc.) homes. No surprise here, Denver is an attractive place to call home, and I don’t see that changing anytime soon!
Now diving into a monthly view, separating attached and detached, you can clearly see the impact of the pandemic starting around March and April. I want to point out (in case you haven’t scrolled to the next chart) the obvious decline in attached during that period. We dove deeper into this back in the fall, when we were coming out of the other side of the dip. More importantly, we have already surpassed pre-pandemic prices for both attached and detached homes. The dip at the end of 2020 is our normal seasonal holiday slump from Thanksgiving to New Years.
The last chart I want to introduce breaks down both attached and detached into median sales price per bedroom. This is an important statistic if you have a gaggle of kids or roommates living with you. I’ve always wondered why we don’t see a ton of kids playing in the neighborhoods closer to downtown. With four children of my own, looking at this chart, I can understand why!
In closing, 2021 is likely going to be a fast-paced, appreciating market on all fronts. Having a strategy to buy a home is important. Before you look at your first home, I’d recommend sitting down and dialing-in on statistics with your real estate broker to come up with a plan. Then work the plan, work it again, and persevere until the keys to your new place are in hand!