It’s a staple in our movies. The hero, fighting overwhelming odds, insurmountable obstacles and facing certain defeat always comes back in defiance leaving audiences cheering for more. Hanging onto the ledge by a finger or saving the day by mere seconds, we collectively root for the hero to overcome the odds and win the day.
Today Denver real estate is the hero.
In March we watched helplessly as the growing fears of the Covid-19 pandemic locked us into our homes, shuttered business and vaporized a roaring economy. In the world of real estate the expectation of the market going off the cliff, as open houses and showing property became unlawful, was all too real. Buyers, who want to stand inside the home and imagine their new life, were left with pictures and virtual tours. But they did it. Through some effort and imagination, the industry found creative ways to get the job done and instead of going off the rails, the market remained strong.
An Expected Decline
This isn’t to say that we didn’t see some fallout. The market retracted in April with listings going under contract dropping 46% from the same time a year ago. Most sellers, however, stayed in the game with the number of active listings on the market dropping by a marginal 1.9%.
Yet in May, as Realtors found new ways to do business, homes under contract showed a whopping 10% increase from May 2019. At 8,195 pending sales, the number of homes under contract was the highest month in more than five years. Through all of the uncertainty and upheaval of the industry, we continued on with a seller’s market and almost no variations in median price.
Kudos to the State
It is easy to be the Monday morning quarterback as we exit the “Stay at Home” and “Safer at Home” restrictions. Attempting to ensure safety while keeping real estate sales moving has been a difficult balance from the Governor, city mayors, county officials and the Colorado Department of Regulatory Agencies (DORA). To everyone’s credit, real estate sales were deemed an essential business and it was clear they were trying to find reasonable restrictions in the midst of the unknown.
Marcia Waters, Director of the Division of Real Estate, held an online industry update on April 30th, explaining how the Division was working with the other government offices during the shutdown. Rules and guidelines were coming from multiple directions during this period, adding a level of confusion to an already difficult time. It was clear Waters understood the impact on homeowners, as well as the agents, offering a candid look at where the Division stood and helping to explain how to work within the parameters of the new rules.
As we exit the shutdown, real estate has rebounded and we appear to be moving into a delayed Spring selling season. Inventory remains tight as buyers are eager to take advantage of the all-time low interest rates. Prices have fluctuated slightly, but have really made no significant moves. Lawrence Yun, National Association of Realtors Chief Economist stated on May 13th, “About 40 percent of the buyers indicate they don’t anticipate any reduction in prices, so there are normal market price negotiating strategies happening.”
With all of the positive signs in Denver real estate, the path isn’t necessarily clear. There is still a dependence on the economy as a whole to come back to pre-pandemic conditions in the next few months. If the economy doesn’t respond, real estate will be negatively affected. In addition, there is a great unknown regarding the Covid-19 virus and if it will come back for a second round in the cooler, Fall weather. Could we endure another shutdown?
As for the current market there is an expectation for a busy summer. There is a lot of pent up buyer demand which is pushing the hot real estate season forward into June and July. In the absence of another blow to the economy, expect to see a market that looks pretty normal.