March brought a record-setting month to the metro Denver residential real estate market, according to the Denver Metro Association of Realtors. With historically low inventory and historically high prices, it’s an awful time to be a home buyer here.
“It’s tough when buyers come into this market and the initial experience is losing multiple offers and having to continue to grind it out,” said Andrew Abrams, Chair of the DMAR Market Trends Committee. “While it's tough for buyers, once they are able to get into a house, they’ll see their equity position rise quickly.”
- Lowest inventory on record with just 1,921 homes available for sale. The previous low was set in February.
- For detached single homes, the 1,122 homes for sale was the fewest amount available since 2015, when 3,325 homes were in inventory.
- Days on the market, on average, dropped to 19, eclipsing the previous 2018 record by seven days.
- The closing price average for all homes (detached single family, and “attached” condos or townhomes) soared to $589,587, trouncing the previous record of $559,872 set in October. That’s a whopping 15.25% year-over-year appreciation from March 2020 average closing price of $511,511.
- There were 4,889 closings in March – the highest ever.
That amount of closings sets up what looks to be a frenzied Spring buying season, which usually ramps up April through July.
“In a highly emotional market, it is one of the most challenging times to hone in on a price,” said Abrams in a statement. “Instead of only using past sales as an indicator, one must also understand how much competition one has when submitting an offer. In other words: the data or facts are only a small piece of the puzzle. The bigger question is what are buyers willing to offer to beat out their competitors and go under contract?"
With the conditions as they are, if a buyer would have waited a month from the end of February to the end of March to buy a $500,000 house, the price would have shot up $35,000, according to Abrams.
Asked about any pandemic impacts on the market, Abrams said the market has stayed strong throughout. If it’s to have any impact, a noticeable rise in inventory later this year might reveal a hesitancy to move during a pandemic.
“As of now, the pandemic did nothing to slow our real estate market,” he said.
Looking to the rest of the year, higher interest rates might slow the market a bit, Abrams said, but it’s definitely not a bubble market – supply and demand have been too consistently strong.
He does not believe new inventory will ease the market for buyers anytime soon.
“Not too much, or at least not in the places we want to see new housing,” Abrams said. “With rising prices for builders, they’re not releasing a lot. …Cities should be creative with zoning and how they want their cities to grow.”