There is a perception that nothing happens in real estate at the end of the year. It’s true that the winter months see the number of listings and transactions decline. The holidays are clearly a distraction, and weather can be a deterrent in looking at homes for sale or making a move. But this past December had moderate weather and the highest number of transactions over any December in the last several years.
A Strong Market Keeps Rolling
With the holidays behind us, the increased activity has rolled right into the new year. Like a flashback to 2016, we have seen a shift to a strong seller’s market. The heavy buyer activity ate up much more of the available inventory. The lower than typical amount of homes for sale and an influx of buyers has the competition for homes on the rise. Denver real estate has picked back up for the moment. Will it last?
Buyers in the Metro area have become very active, making this a great time to sell. While conventional thinking says to wait for the traditional selling months in the late spring, fewer homes on the market today lowers the selling competition and homes move more quickly.
The longevity of the rebound of this seller’s market will rely on homeowners making the decision to sell now and not wait until Spring. As long as potential sellers are waiting for the typical real estate selling season, the demand will remain high. Buyer activity, the obvious other half of the equation, needs to stay strong. Should buyers back off we will return the that gradual shift towards a more neutral market that we have seen over the last two years.
External Forces to Consider
The increased activityis based in part to the roaring national economy. Americans in general continue to feel confident in the economic outlook and there is no indication it is slowing anytime soon. Home buyers are optimistic about their jobs and future, making this a prime time to purchase.
There is no doubt the remarkably low interest rates are helping to keep buyers in the game. An influx of purchases and refinances are keeping lenders busy. There is no indication the Fed will raise interest rates in the near future, helping the buying trend continue.
However, one area to watch is the Coronavirus outbreak in China. The stock market reacted negatively last week to the World Health Organization declaring the coronavirus outbreak a global public health emergency. This may not have an immediate effect on Denver Housing. Good news coming out of China will quickly dampen any negative effects on the economy and it’s business as usual.
How Long Will It last?
As long as the economy remains strong, interest rates stay low and people continue to move into the state, there should be little change in the demand for housing. The one variable for 2020 may be the upcoming presidential election.
Election years are known to create a more turbulent real estate environment due to heightened uncertainty. The outcome of the elections and potential administration change tends to make people nervous. If this becomes a factor, it will likely become more apparent in the fall months as the campaigning heats up. Today, seller’s play a big part in the solid Denver real estate market. As we have seen for several years, as long as we have pent-up demand and homeowners slow to sell, the market should remain hot.