DMAR Real Estate Market Trends Report | MAY '20
Metro Denver’s housing market saw major decline with home showings dropping to a record low mid-April due to the Stay-at-Home order. With restrictions lifted to Safer-at-Home on April 27, approximately 3,500 showings were scheduled that day, more than any other Monday in 2020.
Impacts of the coronavirus on the Metro-Denver housing market were evident in April with new listings, homes under contract and home sales significantly down.
“Even with a stay-at-home order in place throughout most of April, REALTORS® proved we are an adaptable group as we found ways to help buyers and sellers who needed to buy or sell homes,” said Jill Schafer, Chair of the DMAR Market Trends Committee and Metro Denver REALTOR®. “With virtual showings, masks, booties, hand sanitizer and determination to help clients, 3,280 homes were put under contract and 4,679 listings came onto the market. That’s impressive considering the restrictions and uncertainty in our world – but COVID-19 did make an impact.”
By the numbers, in April there were 4,679 new listings on the market, down 29.81 percent month over month and 37.82 percent from the same month last year. At month’s end, 3,280 homes were under contract, down 29 percent month over month and 45.79 percent year over year. The number of homes sold, at 3,603, was down 24.34 percent month over month and 30.78 percent year over year. Total sales volume in April was $1.8 billion, down 25.69 percent over March and 29.73 percent year over year.
“COVID-19 was likely to blame for much of the home sellers’ hesitation, either because of fears of allowing people to tour their homes and possibly expose them to this insipid virus or because they knew they would have fewer showings,” added Schafer.
On March 9, home showings in the Denver area started dropping from a 2020 high, according to ShowingTime, to a low on Saturday, April 18. As the market adapted, home showings started to increase. Colorado’s stay-at-home order switched to a safer-at-home plan on April 27 and on that day approximately 3,500 showings were scheduled, more than any other Monday in 2020. The number of showings have continued to increase every day since.
Despite fewer new listings, the slowdown caused a build-up in the number of active listings at month’s end, up from 5,776 in the previous month to 6,855 at the end of April. That’s an 18.68 percent increase month over month but 2.24 percent less than April 2019. For comparison, the number of active listings at the same time in 2019 was 7,012 and in 2016, 2017 and 2018 it was in the low five thousands.
Even with the increase in active listings at month’s end, the 11-county metro area was still a seller’s market in all price ranges except the Luxury Market. The months of inventory was the lowest in homes between $300,000 to $399,999, with less than a month available, and highest in condos priced over $1 million, with a little more than seven months of inventory.
Schafer states, “There was plenty of positive news. While many worry about the economy and their stock portfolios, Denver-area residential real estate remains a good investment.” The close-price average was down only 1.79 percent at $503,231 from the record in March of $512,386, but that’s still up 1.52 percent year over year and up 3.99 percent year to date. The median close price was up 6.10 percent year to date.
Also according to Schafer, homebuyers realized this wasn’t a time for low-ball offers, big discounts or taking their time to make an offer. Home sellers received an average of 99.96 percent of their list price in April and sold their homes in an average of 20 days compared to 30 last month and 29 days in April of 2019.
“Things have definitely changed, but we’ve adapted,” adds Schafer. “Will the looser restrictions in May cause a flood of new listings from sellers who withdrew their homes or were holding back? Maybe, but there was an 11.6 percent increase in mortgage purchase applications nationally. It’s likely we will continue to see real estate transacted with REALTORS® and their buyers wearing masks and booties and sellers sanitizing after every showing. We are all in this together and it’s important we follow proper showing protocol while still doing our jobs because it’s evident there continues to be a need to buy and sell homes.”
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999). In April 2020, 149 homes sold and closed for $1 million or greater, down 33.18 percent from March and 40.64 percent year over year. The closed dollar volume in the luxury segment in April was $214 billion, down 38.21 percent from March and 46.95 percent year over year.
The highest-priced single-family home that sold in April was $3,275,000, representing five bedrooms, six bathrooms and 4,874 above ground square feet in Denver. The highest-priced condo sale was $3,300,000 representing three bedrooms, four bathrooms and 3,357 above ground square feet in Denver. The REALTORS® representing the buyers and sellers in both transactions are DMAR members.
“The Luxury Market is starting to feel the blow from COVID-19,” said Libby Levinson, member of the DMAR Market Trends Committee and Metro Denver REALTOR®. “Lenders have tightened the requirements for obtaining jumbo loans, the stock market is in flux, the oil industry has seen huge price drops and some of the larger banks have halted cash-out refinance applications. So, how will this all impact the Denver luxury real estate market? Thankfully, the Luxury Market had a strong start for the year.”
Year-to-date through April, there was $875.4 million in single-family home sales, down 3.76 percent year over year. Year-to-date condo sales were down 13.35 percent in April to $107.5 million, compared to $124 million year over year.
In the luxury segment, 132 single-family homes closed, down from 197 month over month and 219 year over year, which is a drop of 33 percent and 39.73 percent respectively. The sales volume dropped 39.04 percent from $308.2 million to $187.9 million month over month. Speaking to the strong start to 2020, year over year, 575 single-family homes have sold year to date, which is just shy of the 581 homes sold in 2019.
The luxury condo segment reflected 17 sold homes, down from 26 the prior month, which resulted in a drop of 34.62 percent month over month and 46.88 percent from this time last year when 32 properties sold. The sold volume dropped 31.51 percent month over month from $38.3 million to $26.2 million in April. This is a 46.53 percent difference from this time last year with over $49 million in sold volume. The luxury condo segment also had a great start to the year with 72 homes sold year to date in 2020, just slightly down from 73 units sold in 2019.
“As we move towards safer-at-home protocols and increasing guidelines for showings, the value of a REALTOR® is becoming even more important,” added Levinson. “We will have to work harder to get our listings in front of potential buyers. On the listing side, we will have to do the extra leg work for our home sellers to pre-screen potential buyers and verify real estate agents are adhering to showing protocols.”
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