The Denver MLS trends data for June 2020 is out. Comparing year over year (June 2019 to June 2020) is better than comparing the previous month, because we have defined seasonality trends.
Inventory is way down, closed prices are up, and a record number of homes were put under contract in June!
Denver MLS Market Stats
- Inventory continues to be off around 33% from this time last year
- We “lost” several thousand new listings during the height of the COVID crisis in March and April
- Since then, the number of new listings this year each week has roughly matched last year
- But we have NOT had a surplus of new listings to make up for the “lost” listings
- As a result inventory is low (7/1/20: 6,400. 7/1/19: 9,500… that’s a lot of missing listings)
- The problem is most acute in entry level product under $300K (that’s in my weekly report, not in this attached report)
- The recovery for inventory has been strongest in luxury (over $900K)
- Closed prices are up
- 2% to 5%, depending on if you look at average or median.
- We’ll dis-aggregate the stats in our quarterly stats; I expect that the smaller homes had more appreciation due to lack of inventory
- Marketing times
- Unchanged. Selling quick!
- Under Contract
- We put a record number of homes UC – we’re in full recovery
- UC count in Jun ’20 was up 27% vs. Jun ’19. That’s amazing!
- You’ll see a lot incremental analysis on this in the weekly trends that I’ll send out shortly.
- Number closed
- Off 4% for Jun ’20 vs Jun ’19. A massive improvement from May!
- July unit count sold should exceed July ’19 by a sizeable margin (perhaps 15%)
- The # UC is up 27%, but I’m not sure that the leap in closed units will be able to keep pace (appraisal bottlenecks, inspector availability, bank backlogs since they are slammed with refi, etc).
- Mortgage rates
- Very low
- New buyer applications for purchase loans is at or near record highs (this is a national stat, not in this PDF. I send it from the Wall Str Journal periodically)
- This is a leading indicator for demand 60-120 days out, which suggests our strong market is going to continue at least thru fall.
The tight inventory should be prompting more construction. However I have heard recently from many builders and developers that construction prices have not really fallen thru this recession, and land prices have not gone down much (if at all) either. However I have heard that banks are more conservative with construction loans. Not surprisingly, the # of new permits for construction is down 12% in Denver. This will exacerbate the problem for buyers (lack of inventory) and continue to keep the negotiation advantage in the seller’s court.
All of the stats show that younger, less educated people were most impacted by the recession and COVID layoffs. It’s possible some of these potential first time buyers had to use their savings they had planned for a home downpayment and use it for living expenses. It’s possible the low end of the market might be the slowest segment to recover.
We can do open houses again, although with a lot of safety precautions. We’re making good progress to restoring a normal RE market!
And… RON (remote online notary) was signed into law by Governor Polis on 6/26, which will help move virtual closings one step closer to reality. Consumers will love it, and it’s one of many long term, positive things that will come out of the COVID issue.
Source: The above executive summary is from Lon Welsh of Your Castle Real Estate.