"How's the Market?" As a real estate agent this is normally one of the first questions I get asked.
My answer "It Depends!"
There's usually many different factors that play into how the market is for each person's specific situation. Are you looking to buy, sell, or both? What are the many other considerations you should be thinking about?
The more general question I'll answer is where is the current market (Denver metro area residential real estate) and what kind of effect has Covid19 had on it?
Lets look at the numbers year over year from August 2019 to August 2020:
New listings are down slightly 0.6%
Active listings are down 40.6%
Pending (under contract) listings are up 26%
Closed listings up 14.7%
What do all these market statistics actually mean?
With new listings relatively equal to last year, we can assume the supply of homes has remained pretty much the same (although we did see a lower number of homes being listed earlier this year at the height of Covid19 shutdowns spring into summer time).
When we add in that active listings are significantly down and pending listings up, we start seeing that even though the supply has remained almost the same, demand has greatly increased.
Closed listings up also confirms that increase in demand.
Months supply is down 43.5%, to 1.3 months.
This is another important number which simply tells us how long it would take to sell all properties currently on the market.
This number is closely tied to average price appreciation with normal markets usually in the 6 month range.
The lower the number the faster property prices tend to increase.
This all leads to what we are now seeing, with half of all new listed properties going under contract within 7 days, and the average closed sale price increasing 11.9% from August 2019. WOW!
These numbers along with what I am seeing in person confirms we are in a "seller's market", currently driven mostly by an increase in the number of buyers in the market.
It's important to remember that these figures are just a snapshot in time and the real estate market is a living "thing" which is constantly changing.
What has led to this increase in buyers?
My opinion is there are a few overall reasons: Even with unemployment at or near record highs, for those who are able to qualify, the historically low interest rates. I also think the increase in people working from home with households sharing space for extended periods of time has led to a need/want of more space.
So, what does it really mean to be in a seller's market or buyer's market?
Does a seller's market mean you should sell right now or put off buying?
I'll give you my take on these questions in the next blog.