The Denver MLS trends data for October 2020 is out. Comparing year over year (October 2019 to October 2020) is better than comparing the previous month, because we have defined seasonality trends.
High points from Oct ’20 vs. Oct ‘19
Inventory down 43%
- Inventory was also down 9% from last month which is a typical seasonal pattern
- I think we’ll see small increases in inventory in 2021 after we get the vaccine distributed
- Still at record lows
- Historically, rates go up +0.5% after a presidential election
- Expect total rate increases in 2021 of 0.5% to 1.0% from the low rates in 2020
Number of new listings brought to market in October ’20: +15%
- That’s a lot better than seasonality would have you expect
- I wonder if some consumers that were reluctant to list their homes due to COVID concerns are more relaxed now?
- Or if the high prices reported in the media are attracting more people to sell (that is how it is supposed to work)?
- Or if the low rates are convincing more people to trade up now while they have the opportunity
- Regardless, I’m grateful we had a large uptick in new sellers in Oct. We sold most of those new listings ASAP
- The preliminary MTD (month to date) results for November suggest a big decline in the number of new listings, which is a normal seasonal pattern. The spike in Oct was likely a (pleasant) blip.
Under contract +27%
- The spike of extra listings was almost entirely put under contract ASAP, leading to a spike in UC
- Our closing count in November ’20 will almost certainly be up a lot from Nov ’19, but I suspect Dec ’20 and Jan ’21 will return to more historical (e.g., low) sales counts
Closed units +16%
- Consistent with the past few months
- I think the first half of 2021 will have lower sold counts due to lack of inventory
- Distribution of vaccine will bring confidence to list more homes in 2nd half, and that will drive sales gains
Price +16% (average), +12% (median)
- As we have discussed a lot recently, this is a MIX shift
- We’re selling a lot more big (expensive) homes and a lot fewer entry level
- The number of homes and condos sold for over $1MM is up 116% from last year. NOT sustainable. The number of homes sold between $300-500K is down 3%.
- Expect this to reverse in 2021.
- Don’t be surprised if several months in 2021 show a decline in the average sold price from 2021 (especially in the 2nd half of 2021)
Days On Market (DOM) -29%
- Pretty consistent with what we have seen all summer
- 24 DOM is almost the lowest on record. If your client is thinking of selling, are they waiting for a better time???
- DOM will remain low until inventories build
- Or… if mortgage rates go up suddenly (I think they will go up gradually), that would stall out sales for a few months and increase DOM
- Average house selling at a small premium (Oct ’20) vs. small discount (Oct ’19)
Homes are doing a little better than condos but not much
- All of these trends mirror what we see in Colorado Springs, Pueblo and North Colorado.
Source: The above executive summary is from Lon Welsh of Your Castle Real Estate.
Denver Housing Trends October 2020
Showing per active listing trends for Denver
VERY strong activity. Unbelievable for this late in the year (and especially with the election as a distraction).
Apartment Association of Metro Denver (AAMD) update for rent and vacancy for 3Q 2020.
- The amount of non-payment of rent remained low, with the majority of respondents saying their results show less than 5% of tenants not paying.
- Metro Denver apartment market showed an overall quarterly decrease in vacancy to 4.9% from 5.1%, with a year over year increase of 0.2% from 4.70%. Vacancy decreased for the majority of counties reported
- Only 2100 new rental units finished construction and were added to the market. We filled 2,900… so we filled every new unit delivered plus 800 or so units that vacant.
- The AAMD does a great job capturing a 300 unit new apartment being delivered, but it’s really hard to capture the small landlords selling units that were rentals to owner occupants. That’s why we started our monthly property manager podcast.
- The average rent went up a bit, from $1506 to $1522.
- And finally, discounts and concessions are up a little, too.
Colorado is among the states with the lowest exposure to increased evictions
The Wall Street Journal provided this great chart below: