"Home prices and seller profits across the nation continue racking up new highs as the housing market remains relatively immune from the economic havoc caused by the Coronavirus pandemic. It's almost as if the housing market and the overall economy are operating in different worlds," said Todd Teta, chief product officer at ATTOM Data Solutions.
Read MoreThe overall housing market has been hot for much of 2020, but some cities are seeing a higher surge in demand than others. Take Denver. Earlier this year, median sale prices for single-family homes and condos in Denver hit record highs of $510,000 and $334,752, respectively. In fact, Denver now has one of the most competitive housing markets in the country, and several factors are contributing to that. Take a look to see if this recipe for a competitive housing market applies to your next investment.
Read MoreNYC buyers leaving the city have re-written the rules of what today’s buyers want and need. As entire families work from the same home, additional space is a necessity, and the safety of lower density communities during the pandemic has driven demand to historic levels in Westchester, Putnam, and Dutchess counties.
Read MoreAnother month of 2020 has come and gone, yet the real estate market in Denver Metro has not slowed down. This year, the concept of a “selling season” does not exist. No matter the time of year, rain or shine, consumers are heading out to find their dream homes in Denver Metro.
Read MoreThe real estate market in Norwalk is looking good, thanks to renewed interest in the suburbs, according to the panelists on The Greater Norwalk Chamber of Commerce’s 4th annual “Real Estate Outlook” discussion.
Read More“The Metro Denver housing market has broken all the records despite the ongoing pandemic. There was a record number of homes sold in the month of August as compared to this month in previous years.”
Read More
By WastonBuys.com | Published October 15, 2020
What happened in September?
Lets discuss.
Denver housing market has set new records again. This is despite Corona-virus. Many pros thought the headwinds of slowing economy and then COVID would cause a pullback for Denver homes but this has not been the case.
Across the board, indicators show gains year on year. The main reasons for continued appreciation are:
1. Housing demand remains very high. Denver still has a net migration increase despite rising house prices. Great companies are still moving to Denver bringing even better jobs.
2. Interest rates are still historically low. This allows more buyers into the market and allows buyers to pay more as mortgage payments are lower relatively.
3. Housing Inventory is unbelievably low. This is due to new homes not being built fast enough and existing homeowners not choosing to list. New home builder and local expert in Denver had this to say. "Raw material prices are increasing dramatically and we have had a labor shortage for years. These two factors are key in pushing up the cost of building. So we either can't afford to build or have to charge a lot more." This is also reflected in the Colorado Rockies resort communities where the, ‘we buy houses’ business in Avon had this comment. "We have noticed people selling homes in Avon are pushing the boundaries and ceiling of the upper limit of what potential buyers are willing to pay causing a slight pause. However, I feel this is the pause we saw in Denver about 8 months ago so I expect yet another strong upward movement in house prices over the next 12 months in Vail, Avon, and other Colorado Rockies resort communities.
For the second time now we have seen Denver house prices surpass $600,000. Last month and now. Properties in the $300,000 to $399,999 are flying off the shelf. New listings remain down when compared to this time last year.
The numbers that have been released continue to show that now is a good time to sell your house in Denver. Denver's strong economy allows potential buyers to bid higher for any given property.
Denver house buying experts we spoke to expect home price records are the result of low rates, strong job market, low unemployment rates, and a steady economy. One concern, which is not a new one, is the affordability of houses for people in Denver.
Denver House prices, trends, and other news.
Let’s take a quick look at the local economy.
Right now let's discuss home prices and the economic growth in neighborhoods in and around Denver so you can understand the way the Denver real estate market is moving. Denver is one of the hottest real estate markets currently in the entire nation and over the last decade or so the annual appreciation for houses has been around 7%.
Denver has some public transportation including buses and rail systems. The light rail system is going through a metamorphosis currently with many new lines being built in the last 5 years and more in the works. Denver is also a very bikeable city. The downtown area in September is extremely walkable. In fact, a walk score is currently at 93 out of 100.
Impact of covid-19 on the Denver real estate market.
Despite the current pandemic the prices of houses have continued to go out. As previously mentioned, the average price tipped $600,000 in the last month. Many experts believe that COVID has caused inventory to lower more than ever before. This is because people do not want to move right now. This puts increased pressure on the real estate market. People that do list their homes are easily able to sell them for a fair price.
Let’s do a quick final summary.
The month of August saw a record number of properties get sold compared to previous years.
6381 houses closed.
Single-family homes sold for a record high. This high was $602,191. This is a 13% increase - year over year.
The average days for the time a house was listed was at 23 days.
By Mike Massaro | Published September 23, 2020
Booming. That’s how real estate experts describe Connecticut’s housing market right now.
According to data provided by the Greater Hartford Association of Realtors (GHAR), there were 832 single-family homes sold in the Hartford area last month, an increase over last August by nearly 24%.
“It’s at an all-time high,” said Holly Callanan, Greater Hartford Association of Realtors CEO.
Callanan explained that with more people working from home they’re looking for a change.
“They are excited to get into new homes. They’re looking for more space so anything that is on the market right now is going like crazy,” she said.
While sales have spiked, listings remained relatively flat, only increasing by 1.1% in August.
“We have a very low supply and a huge demand,” said realtor Julie Corrado.
Corrado has been selling homes for 17 years and said she’s never seen the market like this. With limited inventory, she said there has been strong competition among those looking for a new home.
“It is a challenge for buyers. A lot of buyers make offers and they aren’t getting their offers accepted,” she said.
That was the case for one family who recently bought a house in South Windsor. After a three-month search, they finally settled on a property but to avoid losing it, they said they had to decide within an hour of seeing it.
“It was pretty stressful,” said Lavanya Nangunoori. “We were stressed that entire night and in the morning, to realize, did we actually make that decision?”
With competition being what it is, this family said it also made a max bid on their home.
“There was no negotiation back and forth we said we’re gonna match this offer and moved on,” said Swamy Munukoti.
Corrado said this is typical for buyers around the state. A combination of factors including low-interest rates along with more people working from home has helped drive the market. For those looking to buy she suggested appealing to the seller by:
Telling them what you love about the house.
Get pre-approved from a reputable local lender.
Make a strong deposit
Consider waiving contingencies.
With the demand, prices have soared. The GHAR said the average sales price in August was $290,000, up 14% from a year ago. While it has become a seller’s market, Callanan said buyers need to be on their game and make decisions quickly.
By Sydney Franklin | Published September 8, 2020
City residents head to new developments in walkable suburban communities where they can get apartments with more indoor and outdoor space.
Some New Yorkers who have moved out of the city since the beginning of the pandemic headed to the suburbs, but not to a typical suburban life.
Instead of a house with a picket fence and a front yard, many urbanites have opted to rent in newly developed apartment buildings or to buy condominiums in denser, walkable suburban communities, where apartments tend to be bigger and offer more outdoor space than comparable units in the city. The increased traffic from city dwellers surprised developers at first, but it quickly became clear that many New Yorkers were hoping to secure what they felt would be a safer, short-term future outside the borders of the city.
“Back in April, the narrative of this outbound migration to the suburbs was anecdotal,” said James Fitzpatrick, division president for luxury home builder Toll Brothers. “But over the past three months, that’s now become real and measurable for us.”
Sales on single-family homes in the suburbs spiked when the pandemic began in March. Many families fled New York in search of temporary rental homes or permanent second homes where parents could work remotely, children could attend online classes and everyone could enjoy the summer with sufficient social distancing. New Yorkers who chose to leave the city for a new apartment or condominium, however, had different priorities, namely an affordable and active lifestyle — two things that a locked-down New York no longer offered.
“Affordability became paramount almost overnight,” said Jonathan Miller, chief executive of Miller Samuel Real Estate Appraisers & Consultants. “Covid-19 removed, in the short term, a lot of the things in New York that make it the reason to be there.”
Nowhere is this shift more visible than in the suburbs of northeastern New Jersey. Until the pandemic, Hudson County, which includes Hoboken and Jersey City, was the top-performing real estate market in the state, according to Jeffrey Otteau, president and founder of Otteau Group, a real estate analytics and appraisal firm. But demand for condos, a popular market in this part of New Jersey, dropped by 13 percent from January through August of this year. The rental market there also suffered as people moved farther out into the state. Now, there are over 1,300 fewer occupied apartments in the area.
The rental market just beyond Hudson County, however, is a different story. Across the state’s 19 more suburban counties, new apartment complexes have popped up to take on-demand.
Next door in Essex County, PEEK Properties is opening a 39-unit rental complex at 475 William Street in downtown East Orange. In the two weeks since launching the property’s leasing website, the developer has received over 50 inquiries from prospective tenants, with 60 percent of them coming from New York.
At the end of August, Sherri and LeRoy Lambert moved out of their two-bedroom apartment on the Upper West Side and back to Maplewood, N.J., a place where they had lived and raised their children for 28 years. After also exploring rental options in South Orange, the Lamberts moved into a one-bedroom apartment at Clarus Maplewood, a three-year-old, 20-unit development by JMF Properties.
Mrs. Lambert described the decision as their most logical move for the time being. They plan to relocate permanently to their second home in New Orleans in about five years. “When we were deciding to leave the city it didn’t seem like we wanted to live in some random community,” she said. “Maplewood felt like coming home.”
At Quin Sleepy Hollow, a building in JMF Properties’ portfolio that opened last November in Plainfield, N.J., an average of 12 apartments leased from March to July, but the number jumped to 20 leases in August, and more than a third of the new tenants were New Yorkers.
Seventeen miles north in Bergen County, BNE Real Estate Group two weeks ago started leasing at One500, a 228-unit luxury rental. Thirty-four percent of the newly signed leases have gone to former New York residents.
Benji and Arielle Klein are moving to a two-bedroom apartment at One500 this week from their 600-square-foot spot on the Upper West Side. A handful of their New York friends signed leases in the building as well. “I’m honestly sad to leave the city, but it does help that our friends are there and we’ll have a balcony,” said Mrs. Klein. “We are paying much less for almost double the space.”
Suburban New Jersey isn’t the only area that has benefited from this urban flight. New buildings on Long Island, and in Westchester and Rockland Counties have also seen increased interest from New Yorkers.
At Harbor Landing, a 385-unit, luxury rental complex in Glen Cove, Long Island built by RXR Realty, Joseph Graziose Sr., the company’s executive vice president of residential construction and development said that initially, about 80 percent of the people who viewed Harbor Landing came from within an eight-mile radius of the building. “Now, we’re probably renting to about 30 percent of customers coming east, including New Yorkers,” he said.
Suburban condominiums like the Brownstones at Edge-on-Hudson in Sleepy Hollow have seen a boost in sales since June as well, with about 65 percent of new residents coming from the five boroughs.
Straight east and situated on Long Island Sound in Stamford, Conn., Harbor Point — an 11-building, 3,400-unit development — has welcomed scores of New Yorkers to its newest tower, Allure, in the last few months. Since June, 188 new leases have been signed, according to Ted Ferrarone, co-president of the site’s developer, Building and Land Technology, and about 35 percent of the residents who moved into the building in June came from New York. Three more buildings are under construction in the development.
“The pandemic has turned into a real driver of demand,” he said. “Interest across all our properties slowed for about three weeks at first, but then traffic really ramped up.”
Erika Colon, a headhunter for Covid-19 nurses and the owner of her own recruiting agency, moved to Allure in May after seven years in a 400-square-foot East Village studio apartment. Without a proper desk to work from, she often made phone calls from her bed during the pandemic.
Ms. Colon, who is originally from Stamford, now lives in a one-bedroom, corner unit with ample space and a waterfront-facing balcony. She said she now has enough room to breathe and focus on work.
“Sometimes you have to do something to make sure you feel comfortable from a mental health standpoint,” she said. “New York will always be there. It’s just a train ride away.”
By CRE | Published September 29, 2020
Cypress Real Estate Advisors (“CREA”) has received $67 million for the construction of The Cameron, an upscale apartment community located at 4545 E. Warren Ave. in Denver. The Cameron will be a five-story, 361-unit wrap property, consisting of 30 studio, 239 one-bedroom, and 92 two-bedroom apartments.
Led by Denver-based Principal Chase Hill and Development Associate Adam Wallace, CREA in partnership with Ben Hrouda of Flywheel Capital will develop The Cameron on 2.94 acres as the first of a two-phase build-out plan upon a larger 5.35-acre assemblage.
Located near the Colorado Station RTD light rail stop, community amenities will include a resort-style pool with cabanas and grilling stations, a two-story clubroom, courtyards, a state-of-the-art fitness center, a business café, and an eco-friendly recycling and waste reduction program.
With a population growth of 18 percent over the last decade, Denver’s multifamily market has remained stable throughout the pandemic, outperforming the national averages in both collections and occupancy.
JLL secured the five-year, floating-rate loan with Pacific Western Bank, led by Managing Director Campbell Roche and Senior Managing Director Eric Tupler.
“We are excited to see this unique project become a reality,” said Roche. “Chase Hill and the CREA Team have done a phenomenal job of delivering best-in-class projects on great sites including their CIVIC Lofts community downtown and The Alcott in Jefferson Park. The Cameron will be another successful project capitalizing on its proximity to Colorado Station.”
By Amanda Molitor | Published September 18, 2020
Over the past few months, the Denver Metro real estate market has shown strength and resilience. Despite the uncertainties of the fall quickly approaching, such as the start of cold and flu season, the presidential election, and the seasonal real estate market slow down, consumers continue to buy and sell homes. But not only are they engaging with the marketplace, they’re doing so at an increasingly elevated rate.
According to historic market data, the Denver Metro real estate market usually experiences a dip in buying activity around September, but as reported in LIV Sotheby’s International Realty’s (LIV SIR) Monthly Market Report for August, market activity has actually increased in many facets this season.
In a year-to-date comparison of August of 2020 to August of 2019, total sales volume for Denver Metro has increased by 3%. This rise can be partially attributed to the 4% increase in both average list price and average sold price. As of August, the average list price for homes in Denver Metro was $518,657 and the average sold price was $497,445. As demand for homes in the area persists, the lack of available inventory pushes prices for properties upward. The desire to buy homes, and quickly, can be seen by looking at the average days on market. In August, homes spent 3% less time on the market, bringing the average days on market for Denver Metro homes to just 31 days.
Buyers looking to find their dream homes in Denver Metro are having a lot of luck in the luxury sector of the market, defined as homes priced at or above $1,000,000. According to the Monthly Market Report from LIV SIR, listings sold and total sales volume within the luxury market each grew by 6% in August, compared to the same time period in 2019. Consumers are quickly purchasing luxury homes in this market which has caused a 10% decrease in the average days on market within this sector. Denver Metro is seeing an influx of new luxury listings coming onto the market, which will give buyers more options to choose from in an area that is typically low on available inventory. New luxury listings increased by 16% in August.
Several significant sales took place during the month of August. Perhaps the most impressive sale was 3901 South Gilpin Street, which was represented by LIV SIR brokers, Chris Bouc and Ian Wolfe. This gorgeous home sold for $9,000,000 last month. LIV SIR broker, Elaine Stucy, had the pleasure of representing the selling in the sale of 14065 Highway 83, in Colorado Springs which was the highest-priced residential sale in Colorado Springs.
It appears that there is still time for buyers and sellers to reach their real estate goals in the Denver Metro community this year. To learn more about the current market conditions and to view all of the Monthly Market Reports for the areas that LIV SIR serves, visit coloradomarketreports.com. And for all of your real estate needs, contact LIV Sotheby’s International Realty by calling 303.893.3200 or visiting livsothebysrealty.com.
By Matthew Haag | Published August 30, 2020
Over three days in late July, a three-bedroom house in East Orange, N.J., was listed for sale for $285,000, had 97 showings, received 24 offers, and went under contract for 21 percent over that price.
On Long Island, six people made offers on a $499,000 house in Valley Stream without seeing it in person after it was shown on a Facebook Live video. In the Hudson Valley, a nearly three-acre property with a pool listed for $985,000 received four all-cash bids within a day of having 14 showings.
Since the pandemic began, the suburbs around New York City, from New Jersey to Westchester County to Connecticut to Long Island, have been experiencing enormous demand for homes of all prices, a surge that is unlike any in recent memory, according to officials, real estate agents and residents.
In July, there was a 44 percent increase in home sales for the suburban counties surrounding the city when compared with the previous year, according to Miller Samuel Real Estate Appraisers & Consultants. The increase was 112 percent in Westchester, just north of New York City, and 73 percent in Fairfield County, Conn., just over the state border.
At the same time, the number of properties sold in Manhattan plummeted 56 percent, according to Miller Samuel.
The suburban demand, driven in part by New York City residents who are able to work remotely while offices are closed, raises unsettling questions about how fast the city will be able to recover from the pandemic. It is an exodus that analysts say is reminiscent of the one that fueled the suburbanization of America in the second half of the 20th century.
It is not just crowded open houses, multiple offers, and bids above asking prices. People in New Jersey suburbs who have no interest in putting their homes on the market are receiving unsolicited calls and knocks on the door from brokers asking if they want to sell.
Of course, residents have left New York City for the suburbs for decades, especially to bring up children in towns with strong public schools. And it is very difficult to predict whether the new migration will continue at this pace once a vaccine for the coronavirus is available and office towers in the city fully reopen. What’s more, most New York City residents do not have the means to spend hundreds of thousands of dollars on a home in the suburbs.
Experts have predicted New York City’s demise during past crises, including the Sept. 11 terror attacks, only to be proven wrong. In fact, even as office towers in Manhattan remain largely empty because of the outbreak, some businesses, including Amazon and Facebook, are expanding their footprints, betting that workers will eventually return to their desks.
Still, many companies and workers have become much more comfortable with remote work during the outbreak, suggesting that the suburbs will remain very attractive for the foreseeable future.
For now, many buyers in the suburbs are expressing concern about the health risks of living in densely packed urban neighborhoods. Facing pandemic restrictions, they want room that New York City often cannot provide: a yard for their children to play and an office to work remotely. Many want land, even if it means being farther away from Manhattan.
Some buyers have told brokers they are concerned about reports of rising crime in New York City, real estate agents said. (Overall crime has not spiked in the city, but shootings have, Police Department data shows.)
“The people from New York are coming with a sense of urgency, and the thing they want is space,” said James Hughes, a real estate agent in New Jersey, who added that roughly 60 percent of potential buyers for his properties live in the city. “The demand is insane.”
Zack Stertz and Zoe Salzman joined the buying frenzy in June. After 15 years in Brooklyn, they said they realized soon after the pandemic struck that their two-bedroom apartment with a backyard, generous by New York standards, was too small for working from home with two young sons.
They could not afford a renovated brownstone in Brooklyn and were worried that New York City schools would not open for in-person classes in the fall, so they looked at New Jersey. They weren’t the only ones, their broker at the Allison Ziefert Real Estate Group warned them, suggesting they act fast.
When a four-bedroom house in Maplewood, N.J., appeared on the market on June 12, they toured it on June 14 and two days later submitted an offer over the $799,000 listing price — the highest bid among many offers. The sellers accepted it.
“To give up living in Brooklyn and move to suburbs, we just couldn’t see ourselves there,” said Ms. Salzman, 39, a lawyer whose office is in Manhattan. “But the pandemic helped make this choice for us.”
The flight out of New York City could inhibit the city’s economic recovery and its ability to maintain quality-of-life services like the police and sanitation, said Maria Doulis, vice president of strategy and operations at the Citizens Budget Commission, a nonpartisan fiscal watchdog.
“What is worrisome is that the high-income earners, particularly those with more than $1 million, provide a substantial amount of resources to the New York City budget,” Ms. Doulis said. “To lose them would really represent a blow to the budget.”
Mayor Bill de Blasio said this week that he had no doubt that New Yorkers who left during the pandemic would eventually return, though he appeared to be referring more to people who had temporarily moved elsewhere, including to second homes.
“If you don’t think New York City is coming back,” Mr. de Blasio said, “then you don’t know New York City.”
Still, real estate agents across the region say they have been swamped with calls from New Yorkers who are rethinking their desire to stay.
Moving companies have said they cannot keep up with the demand. Metropolis Moving in Brooklyn said the number of quotes for out-of-state moves jumped by more than 200 percent in May and in June compared with those months last year, and by more than 165 percent in July versus a year ago. Most people seeking quotes were moving to the city’s suburbs, he said, though others were moving to areas stretching from Washington, D.C., to Boston.
Across New Jersey, more than 29,700 homes were sold in June and July, an increase of 33 percent over the same period in 2019, according to the Otteau Group, a real estate data, and appraisal firm.
Jeffrey G. Otteau, who is the president of the company, said the buying spree was particularly notable because it was happening when fewer homes were on the market.
From the start of the year through July, the inventory in New Jersey dropped 40 percent compared with the same period last year — a sign that many homeowners in the state were staying put during an uncertain economy.
“The demand has to come from somewhere, and we think most of that is coming from New York City,” Mr. Otteau said. “In some ways, this looks to me like the 1960s and 1970s, when there was a large outflow of the population pushing into the suburbs.”
Mr. Hughes, the New Jersey real estate agent, said he had multiple clients who each lost bids on about half-dozen homes, including a two-bedroom house in East Orange that received 25 offers. It sold for $345,000 — 21 percent over the asking price.
“It’s crazy for any period,” he said.
For more than two months, Rennes Toussaint and her fiancé, Olajide Keshinro, have been looking at houses in New Jersey. The couple, who live in a 500-square-foot apartment in Queens, have submitted offers for four homes but lost out on all of them.
Before the outbreak, the couple discussed leaving the city for the suburbs, but never this soon. It became urgent when Mr. Keshinro, who plays professional basketball overseas, suddenly returned home early, Ms. Toussaint said, and the apartment felt even smaller.
“We thought it would be easy, but it’s very, very, very competitive,” Ms. Toussaint, 33, said about the housing search.
In New York’s Hudson Valley, the number of homes sold in July in Putnam County jumped 35 percent from the year before; they climbed 19 percent in Dutchess County.
Melissa Carlton, a broker at Houlihan Lawrence, said the area’s picturesque towns and scenic views had long attracted second-home buyers and people who want weekend getaways. But New York City residents have recently explored the area for permanent residences.
“Last year, people would say that a property may be too far away from the train station,” Ms. Carlton said. “That is not the case this year.”
That is how Rehana Alam and Sadi Alam feel. They live with their three children — ages 9, 7, and 4 — in a home they own in Jamaica, Queens. It is a 15-minute commute for Sadi Alam, a podiatrist, to get to work.
But the Alams have been concerned that their children have been largely confined to their home during the pandemic. Over the summer, the couple decided to get more indoor and outdoor space for their children.
On Wednesday, they closed on a five-bedroom house with a pool on two acres in Dix Hills, Long Island, about 30 miles east of Queens.
“The best thing I could have done was provided them more space,” Ms. Alam, 35, said. “Looking at their sad faces, it just wasn’t worth staying in Queens.”
via WREX.com
By CNN | Published on August 6, 2020
(CNN) — While many businesses have taken a hit during this pandemic, others have been booming. Some in real estate say the coronavirus is pushing younger home buyers out of the city and into their first homes.
For many young homebuyers, Covid-19 is making the green space of the suburbs more attractive.
"The value of the city to us was being around all the people being able to go to all the restaurants like the culture and the museums and the plays and everything so you remove all that it's difficult to justify paying the rent, being in a small confined space and having no access to being outdoors by yourself," says prospective home buyer Eileen Norton.
First-time homebuyer applications jumped 20% in June compared to that same month the year before, according to CoreLogic, a company that analyzes business statistics.
One real estate broker says shes seen sales skyrocket.
"We're based in Darien, Connecticut, so in the first six months, which is really incredible when you think about how much business was not being able to be done during the pandemic," says Connecticut based real estate broker Jessica Bauers, "Fairfield county as a whole did about $2.36 billion in sales and that's 12% over this same period last year and even better than that if we're just looking at the end of June to the end of June pending sales are up 49% it's really skyrocketed."
via 9News
By Ryan Haarer | Published September 3, 2020
DENVER, Colorado — The latest report from the Denver Metro Association of Realtors (DMAR) shows the average price of a detached home in the 11-county metro area hit a record of $606,330 in August.
Demand is extremely high as potential buyers look to take advantage of low-interest rates.
The report shows that 5,959 homes were sold in August 2020, more than any other August on record. But the inventory was also lower than any previous August, dropping 41.22% year-over-year.
“I call it the Vicious Circle," said Jill Schafer, trends committee chair for DMAR. "I think that people would like to move and perhaps change school areas or get to a bigger home or downsize. But when they look at what's out there, they can't find anything they can get excited about or find anything at all.
"So they opted not to go anywhere and then they put their houses on the market."
The bottom line, there are not many deals out there. Buyers should expect to pay full price -- if not more ... and that’s if they don’t get outbid.
“Buyers need to be patient," Schafer said. "They need to have someone who's experienced writing offers in this kind of market and they need to know that they're going to be putting all their cards out on the table that they are not going to really be able to negotiate.
"In fact, they may have to make compromises. They may have to choose a different neighborhood than what they wanted or a smaller home than they wanted.”
via Colorado Sun
By Tamara Chuang | Published August 27, 2020
From the start, 2020 was going to be big for American Financing. The Aurora mortgage lender had a major marketing coup: a celebrity endorsement from Peyton Manning, who led the Denver Broncos to a Super Bowl win in 2016.
Then the coronavirus hit.
The 400-plus employee firm was no longer sure TV commercials starring Manning would attract enough business to hire 200 more people this year. To keep existing staff, it applied for a federal relief loan and received one for more than $5 million. But then interest rates plummeted, and demand to refinance exploded. The company began hiring like crazy, and is now at 600 employees (and still hiring). It paid back its federal Paycheck Protection loan.
“I think there is a silver lining (in the pandemic). People can look to refinance to save themselves some money each month and then take that money and put it back in the economy if they want to,” said Jonathan Payne, American Financing’s vice president of sales. “Good employment with us as well as low interest rates are driving people to refinance, save money (and that’s) a good thing for the mortgage industry.”
But just as American Financing and the homeowners it helped found a way to better themselves amid a harrowing pandemic economy, another part of the mortgage industry fared much worse. The number of Coloradans who didn’t pay their mortgages in July spiked to near record levels, according to new data from the Mortgage Bankers Association. Hardest hit were Federal Housing Administration loans, which are designed for low- to moderate-income households.
“The delinquency rate has risen, and the major reason for it is unemployment,” said Marina Walsh, the association’s vice president of industry research. “If people don’t have jobs, they can’t make their mortgage payment.”
The loss of hundreds of thousands of jobs in the past five months has widened a housing divide that existed in Colorado before the pandemic. In January, the number of people homeless in the five-county metro Denver region had increased from the year before. By July, the demand for housing pushed prices to record levels.
Growth was expected to slow in 2020, according to the University of Colorado economists’ forecasts at the end of last year. And the U.S. officially entered a recession in February, a month before Gov. Jared Polis began issuing a slew of executive orders to stem the spread of the strange new virus in March.
As some spots of the state’s economy continue to enjoy growth, life is worsening for the ones that were faltering before COVID-19 struck. And there are signs that a more difficult period is around the corner.
Last month, Denver Homeless Out Loud volunteers counted 664 tents — estimated to be sheltering 1,328 people — on a single night in one part of downtown Denver. That’s about 30% more people than the annual census counted in the city in January (which was at nearly twice the number from a year earlier).
Meanwhile, the National Western Complex was turned into a temporary shelter that was used by roughly 3,000 unique individuals between April and July, said Cathy Alderman, public policy officer for Colorado Coalition for the Homeless.
“The fact that we’re seeing a boom in home purchases and refi’s, it all goes to kind of this widening economic disparity that we have, especially in the Denver area but all across the state, frankly,” Alderman said.
For many people, she added, homes are not affordable. Rents for low-income families were out of reach before the pandemic.
“We’ve had an eviction moratorium in place at both the state and federal level (and) requirements that landlords provide more time for renters to pay back due rent. And those things are expiring or in many cases, have expired,” Alderman said. “I feel like September is really going to be more of our bellwether month for what we consider to be an eviction crisis.”
Colorado’s high rate of pandemic unemployment — in the past five months, some 713,241 Coloradans filed for the first time — hit the lowest-wage industries the hardest: retail, accommodations, and foodservice. Many of those workers rent.
States and the federal government stepped in to protect renters who had lost jobs, by delaying evictions. But Colorado’s eviction moratorium and an order prohibiting late-rent fees ended June 13, allowing the eviction process to begin. An exception is rentals covered by federal housing assistance, which delayed a landlord’s right to evict to Aug. 11 before giving a 10-day notice, according to the state Division of Housing FAQ page on rents and evictions.
Even so, as of July 20, 93.9% of renters had paid their July rent. The month ended with about 1,139 evictions, or about one-third the normal monthly number, according to the Colorado Apartment Association, which represents 60% of the state’s multi-family units and landlords.
There are several reasons why the eviction rate was so low in July, said Drew Hamrick, general counsel and senior vice president of government affairs for the Apartment Association of Metro Denver. Just because somebody can’t pay rent doesn’t mean they will be evicted.
“When times are good, people expand their demand. They decide they don’t need a roommate, they decide they don’t want to live with their parents anymore, they decide that their spouse is unbearable. All those kinds of things expand the demand,” Hamrick said. “And when times are bad, people start roommating up, they start moving in with parents, they start saying, ‘I don’t need a Class A apartment, I can settle for less square footage and fewer amenities.’”
It’s too early to tell where the rental market will end up this year, Hamrick said, but it’s nonsense to think there could be more than 450,000 evictions in Colorado, as some housing advocates have warned. That would be more than two-thirds of the apartment units in the state, he said.
“There’s never going to be a time when there are 627,000 rental units and somebody is going to evict 400,000 of them and 400,000 Coloradans are going to be living in parks while there are 400,000 empty apartments,” Hamrick said. “That’s just not the way the market works. What you’ll see is pressure to start decreasing rents and higher vacancy rates.”
Some of that is starting to happen. Average monthly rent in metro Denver decreased about $30 in the second quarter, a period when rents typically increase, researchers at the University of Denver’s Daniels College of Business found.
There’s also evidence that people are still moving to Colorado. Just last week, Amazon announced that it’s added 100 tech and corporate jobs in Denver, where it already has 130 openings for tech workers. Palantir Technologies, whose data analysis technology is sold to governments and private companies, is moving its headquarters to Denver from California, the Denver Business Journal reported.
“With all this work at home, people are saying, ‘I don’t have to live in New York anymore. I can do my job remotely and therefore Colorado is on the table,” Hamrick said. “We’ve got a couple of markets, like Colorado Springs in particular, that have been hot.”
The more immediate issue for renters is the fate of federal relief, said Brian Lewandowski, executive director of the Business Research Division at the Leeds School of Business, University of Colorado.
Workers laid off because of coronavirus closures earned an extra $600 a week, which propped up the slashed incomes in the short run. Some of the financial aid, however, has now ended, though new programs have kicked in.
“I’m more concerned about the rental side because I think the federal payments did make a difference for renters,” Lewandowski said. “And if that goes away, I do worry about the strain.”
Lewandowski expects the economy to fully recover, just as it did after the Great Recession. But it could take years. And that could widen the gap between those who can afford to refinance and those who can’t make rent. It’s called a K-shaped recovery, where inequality widens.
“If you picture the K, there’s divergent ends,” he said. “You’ve got the people who have the jobs and maybe have more wealth, and then the people who don’t and are sort of left behind in the recession. And they’re left behind in the recovery.”
Even as open houses were banned in the spring, prospective homebuyers found their way to signing contracts. They wanted single-family houses.
Statewide, the number of single-family homes for sale dropped in April but picked back up in May, June, and July. Last month, 21.3% more houses sold than in July 2019, and the median sales price went up 8.6%. For the year, sales are down 2.8% though prices are up 6%.
Matthew Leprino, a Realtor in Denver, said he thinks people want a larger space. They don’t want to be stuck in a small condo downtown with nowhere to go.
“A buyer who was looking for a property last August may have said, ‘I’m only in my property so often. I don’t care if I buy a one- or two-bedroom condo. I’m only there to sleep and watch some Netflix and then I leave and go to work the next morning or I’m out with friends all weekend,’” Leprino said. “In August 2020, that property needs to be so much more: the gym, the office, the studio. And I think people are willing to pay a little bit more, so that could have something to do with how on fire our market is.”
For single-family homes, that seems to be true. Condos? Not so much.
Sales of townhouses and condos have declined every month since March, compared to the same time last year. Median sale prices have increased by 4.9% for the year, but sales are down 6% compared to the same time last year. And the supply has been growing, with enough condos for sale to last 2.4 months in July, compared to 1.9 months in January.
Leprino said that two weeks ago, he put a client’s downtown loft on the market that a few months ago “would have sold in a heartbeat because of the demand.” After a week, only one prospective buyer had looked at it.
“I just had a conversation with my clients and said, ‘Hey guys, the demand isn’t there right now. I don’t want you guys to waste days on market. Let’s revisit this in the fall. Let’s see if people are coming back to the city,’” he said. “That would not be the case with a single-family home anywhere in the metro area.”
But this could be a way in for first-time homebuyers who didn’t feel they could buy a home before the pandemic. The slowing price growth for condos combined with very low-interest rates means house hunters can afford more house than before, said Payne, with American Financing.
“It’s really good for borrowers,” Payne said. “It’s making a difference for the customers who are saving hundreds of dollars a month or tens of thousands over the life of the loan just by getting that lower interest rate.”
American Financing in Aurora borrowed a federal Paycheck Protection loan between $5 to $10 million. But during the first months of the pandemic, business thrived so owners Damian and Gabie Maldonado returned the money and paid back what they had used. (Handout)
People who can sell their homes and move up during the pandemic appear to be doing so. It’s just those people living off savings and credit cards who will have a rough time in the coming months.
“People that are paying their mortgages, own a home and might even be getting mortgage forbearance or mortgage assistance during COVID are probably gonna be OK,” said Alderman, with the Coalition for the Homeless. “We need to support and keep that the way it is because we don’t need any of those people to be falling into housing instability or homelessness.”
But for those who don’t have the means, something’s got to give if coronavirus safety measures continue to limit business operations and a return to full employment.
“Most people over the last few months have been using their savings and credit to pay for things that they normally would have paid for (from an income),” Alderman said. “And those are not sustainable funding sources for people.”
In Colorado, the second quarter saw a near-record rate of folks who didn’t pay their mortgage on time, according to the Mortgage Bankers Association.
At a 6.22% delinquency rate, Colorado is doing better than the nation’s 8.22%. But the numbers get worse if you look at the type of loans borrowers are delinquent on. For FHA loans, delinquency rates jumped to 14.65% in Colorado last quarter, topping the previous high of 11.89% in 2009.
“It’s not great. It certainly is a big uptick in a short amount of time. It’s definitely worrisome to see delinquencies at this level, especially FHA. FHA was at a survey high for delinquency rates, and our survey goes back to 1979,” said Marina Walsh, the organization’s vice president of industry research.
“Usually delinquency follows pretty closely with the unemployment rate and the unemployment rate spiked up more than our delinquency,” she added. “I do believe the stimulus that’s being offered is helping to some extent. But these are not pretty numbers at all. To see a four percentage point jump in the delinquency rate in three months is rather startling, and we’re at the highest delinquency rate overall that we’ve been in nine years.”
Colorado may be doing better than other states because it’s more diverse, with strong aerospace and technology companies that coexist with the ski resorts, hotels, and restaurants that were hit hard by COVID closures.
Euclid Hall Bar and Kitchen closed in March after 10 years on Larimer Square. (Jennifer Olson, Special to The Colorado Sun)
But many of those jobs are not coming back, said Lewandowski, with CU’s business school, which recently revised its 2020 economic update. Instead of adding 40,100 jobs, Colorado is expected to lose 128,500 jobs this year.
Several restaurants have closed permanently, so there’s obviously no plans to rehire staff. Concert venues, convention hosts, entertainment venues, and other businesses that rely on large crowds aren’t operating in the same way so fewer employees are needed. Consumers have changed their behaviors by shopping online instead of in person. They’re not splurging on a vacation and plane tickets. They’re spending more on products, instead of services. Businesses will have to adapt.
“I think we’ll regain all of those jobs lost, meaning that we will get back to our peak employment at some point, as we did after the Great Recession,” he said. “There is a resiliency where people do find a new path, and people who want to find a new job will find one. We will regain those jobs lost. But I also think it will take two, three, three-and-a-half years.”
Can’t pay rent or your mortgage? A guide to Colorado resources:
Emergency Housing Assistance Program from Colorado’s Division of Housing and created during the pandemic. Offers rental and mortgage assistance
Property Owner Preservation, a Colorado Division of Housing program created during the pandemic. Works with landlords to provide rental assistance on behalf of tenants
2-1-1 Colorado: Dial 211 on your phone to contact one of six call centers across the state that provide rent assistance to qualified applicants
Salvation Army Housing Now program: Provides short-term retinal assistance
Colorado Foreclosure Hotline (877-601-HOPE) offers resources and options for mortgage holders falling behind.
Colorado Apartment Association rental assistance resource list: caahq.org/main/colorado-housing-financial-assistance/
Need Help Paying Bills Colorado: Offers links to more information about short-term assistance with utility bills, healthcare, and housing.
By Jeannette Ross | August 12, 2020
Wilton has not seen real estate numbers like these in a very long time. July was expected to be a big month, but it was stupendous.
There were 57 single-family homes sold in July, a 78.1-percent increase over the 32 sales recorded in July 2019, according to a report from Halstead Real Estate. That number just misses the 58 homes sold in July 2004, the best in recent memory.
July’s performance boosted Wilton’s seven-month total to 164 homes sold, an increase of 22.4 percent over the 134 homes sold January to July in 2019. As of July 31, there were 49 pending sales, compared to 29 a year ago. There were 171 active listings on July 31, compared to 221 on the same day last year.
The average closing price for the first seven months climbed 6.2 percent from $794,547 to $843,832.
Condos also saw a bump with 16 sales in the first seven months, compared to 11 in 2019. There were 22 condos on the active sales list as of July 31.
Condo prices also rose, from an average of $314,173 last year to $350,844 for the first seven months of 2020. That’s an increase of 11.7 percent.
John DiCenzo, Halstead’s executive director of sales for Westport and Wilton, said he was not surprised at the number “but that’s quite a leap above,” he said, of last year’s number. “It’s indicative of the frenzy,” he said, adding, “I haven’t seen a market that’s turned as quickly.”
He was referring to the pivot the market made from April to May. On April 30, 2020, there were 604 homes in the pipeline that indicates binder transactions and housing deals in contract in the 10 lower Fairfield County towns and cities the report tracks. That was 18 percent fewer than the 743 in the pipeline on April 30, 2019.
A month later, on May 31, 2020, there were 920 homes in the pipeline, 7.4 percent more than the 856 a year earlier, and 252 more than just a month earlier.
The $700,000 to $899,999 price range is the most active so far this year, with 52 homes sold this year of the 164-home total. In July, there were 16 homes sold in that price range.
The $500,000 to $699,999 price range is also very active, with 45 homes sold during the first seven months of this year, 18 in July.
There have been 30 homes sold in the $900,000 to $1.2-million range sold so far this year, almost double the 17 sold last year. Eleven were sold in this price range in July.
Every town in lower Fairfield County surveyed by Halstead Real Estate showed an increase in sales numbers in July, with the greatest percentage increase shown by Westport, with 95 sales this year compared to 32 last year, for a jump of 197 percent.
New Canaan’s increase was more modest, rising from 32 sales in 2019 to 46 this year, but it had the greatest increase in the average closing price, jumping 17.4 percent to $1,610,109.
Greenwich had the highest overall average closing price of $2,135,545, although this was down 10 percent from last year.
The pipeline for continued energetic sales also looks promising. On July 31, the pipeline that indicates binder transactions and housing deals in contract stood at 118 for Wilton, compared to 43 in 2019.
On Aug. 1, there were 49 homes in contract, compared to 31 closings last year.
“I think we will easily eclipse 31,” DiCenzo said.
For lower Fairfield County, the pipeline showed a 68.4-percent increase with 1,420 houses under a binder or in the contract as of June 30. As of July 31, the pipeline showed a 120.8-percent increase with 1,387 houses in the pipeline, compared to 628 a year ago.
What is causing a bit of frustration among buyers is the lower inventory, DiCenzo said. In July, there were 175 active listings in Wilton, far fewer than the 227 at the same time last year. In 2018, the inventory was even higher, at 255; 237 in 2017; and 261 in 2016.
Wilton’s July home sales totaled $50 million, an increase of 79 percent over last year. For 12 cities and towns in lower Fairfield County, the total dollar volume of closings was $944 million, an increase of 55 percent over July 2019.
“This is the highest dollar volume of closings for July in at least the past 15 years,” the report said. The number of house closings — 828 — was also the highest total in the last 15 years.
Halstead also included an analysis of the rental market with its monthly market report. It shows there have been 59 long-, short- and flexible-term rental closings for single-family homes so far this year. That is up almost 64 percent over the 36 recorded for the same period in 2019. The rental market heated up beginning in April.
What is significant is the increase in monthly rental prices, jumping from an average of $3,648 in January to $7,895 in April, $11,832 in May, $14,670 in June, and $9,770 in July.
The number of condo rentals jumped from eight in 2019 to 13 so far this year, but prices were flat at an average of $2,728 per month this year.
Multi-family rentals remained the same at two, this year and last year, and prices actually dropped from $2,323 in 2019 to $1,685 in 2020.
via The Denver Post
By Joe Rubino | August 22, 2020
Demolition work is expected to get underway next week on a former Colorado Department of Transportation regional headquarters in southeast Denver, the first step in bringing 198 new homes to the area.
Arapahoe County-based builder Lokal Homes has been tapped to turn the former CDOT Region 1 complex into the Hub at Virginia Village, a collection of market-rate townhomes scheduled to rise on the property, at 2000 S. Holly St. northeast of the Holly and East Evans Avenue intersection, over the next few years. It’s a rare infill housing development in a city where demand for for-sale homes seems only to have increased during the COVID-19 pandemic.
“We’re excited because we’re a local builder in the area,” Robyn Asbury, Lokal’s vice president of sales and marketing, said Friday. “It’s such a great location. We’re looking forward to creating a fun, liveable product that will fit in with in the neighborhood.”
If site work goes as planned Lokal will get started on its model homes in March, Asbury said, but the company doesn’t own the home sites yet.
Builder Capital, a Maryland company specializing in providing lot financing for home builders, partnered with investment firm 400 Capital Management to acquire the lots, according to a news release last week. The deal closed last month, Asbury said.
Builder Capital has a land banking agreement with Lokal and will sell the lots to the company in stages as development progresses, a strategy meant to keep pressure off of Lokal’s balance sheet and make it easier for the company to build homes at “attainable price points,” according to the news release. The three companies worked together last year on a land banking arrangement covering 425 lots spread across Aurora, Commerce City and Colorado Springs.
“Builder Capital is pleased to enhance its footprint in the western region of the U.S. with a great builder like Lokal Homes and is honored to be part of Lokal’s continual growth in the state of Colorado,” Bill Southworth, Builder’s managing director, said in a statement.
Before Builder Capital came into the picture, Denver developer Kentro Group acquired the property in early 2018 through a complicated, $19.3 million deal negotiated by city officials that also transferred CDOT’s now-former headquarters at 4201 E. Arkansas Ave. to Kentro. Kentro received City Council approval to develop a mixed-use project including 150 below-market apartments at the Arkansas Avenue property in December 2018.
Kentro is still the master plan developer for the South Holly site and is working with another group, McDermott Properties, to build a 63-unit affordable housing complex for seniors on the northern portion of the site, according to Kentro co-founder Jimmy Balafas. That project should break ground in fall 2021.
Kentro will share infrastructure expenses with Lokal, Balafas said.
“We selected Lokal as our partner because they are Denver natives, and they plan to build homes in an attainable price range, starting in the low ($400,000 range),” Balafas wrote in an email to The Denver Post.
City Councilman Paul Kashmann, whose District 6 includes both former CDOT properties, said Denver needs more housing for people at all income levels and he is looking forward to seeing more homes priced for working family built in Virginia Village. Real estate site Zillow pegs the median home value in the neighborhood today at more than $500,000.
“We’ve got all the $2,200-a-month studio apartments we need,” Kashmann said. “We need housing that allows people to begin building wealth for their family and security for their family.”
via CNBC
By Robert Frank | August 6, 2020
Apartment contracts in Manhattan fell by more than half in July, while deals in many New York suburbs more than doubled, showing a continued flight from the city over the summer.
The number of signed contracts for co-ops and condos in Manhattan — the best real-time measure of activity — dropped 57% in July compared with a year ago, according to a report from Miller Samuel and Douglas Elliman. The high-end of the market is getting especially hard hit, with co-ops priced at $4 million to $10 million down over 75%.
As deals dry up, the number of apartments listed for sale is surging. New apartment listings jumped by 8% in July compared with a year ago. The number of unsold apartments is now at the highest level in almost a decade, according to Jonathan Miller, CEO of Miller Samuel. At the current sales rate, there is more than a 17-month supply of apartments for sale — more than twice the typical Manhattan average of about eight months.
Miller said the lockdown in the city — which prevented brokers from showing apartments until late June — combined with hundreds of thousands of affluent New Yorkers fleeing the city for the suburbs during the coronavirus pandemic made for a tough July, and potentially the summer.
“The city is less of an anchor now,” he said. “It’s going to take longer for the city to recover than the suburbs.”
Suburbs around New York had a banner July, as New Yorkers purchased second homes for escape — and possibly a new primary residence. Sales contracts in the Hamptons more than doubled in July, with 267 deals. Signed contracts in Westchester County, New York, also more than doubled to 987 deals.
Connecticut has been an especially large beneficiary of New York City’s troubles. There were more than 1,200 signed contracts in July in Fairfield County, Connecticut, while Greenwich saw an increase of 72%.
“Anything within a two-hour radius of the city is as busy as it’s ever been,” said Scott Durkin, president and chief operating officer of Douglas Elliman. “There’s just this fear of density right now.”
Still, New York real estate brokers say the city will recover quickly, once there is a vaccine and companies start bringing workers back to the office. They point to Sept. 11 and the Great Recession as proof that the city always rebounds. And they say the deep discounts that many buyers are hoping for aren’t likely to materialize since sellers have so far balked at big price cuts.
“We had price cuts before Covid,” Durkin said. “With interest rates so low, prices may not be as negotiable as some buyers might hope. But there will be people in different situations, and some might need to sell.”
One segment that will likely have to cut prices is new condo developments. Brokers say new developments, which listed with sky-high prices during the past few years, will have to adjust to the more competitive market.
On Wednesday, the Getty Residences — a glamorous new condo building in downtown Manhattan designed by Peter Marino — announced price cuts of more than 50% on some units. One full-floor unit, with more than 3,800 square feet, had once been offered for over $20 million and is now listed for $10.5 million. The penthouse of the building was sold in 2018 for $59 million to hedge fund billionaire Robert Smith.
via Forbes
By Ellen Paris | August 15, 2020
Here’s the latest news on New York City’s real estate market from brokers with “boots on the ground.” After more than three months in lockdown when New York’s brokers and agents were not allowed to show properties, the market is up and running again—kind of.
Lisa Chajet an associate broker with Warburg Realty since 2003 sums up the current market. “I think the best way to look at is we were not allowed to work for almost three months. Then around mid-June, we could start showings again with restrictions. We immediately saw a pent-up demand. I sold three apartments very quickly,” Chajet said. “Our Spring market got shuffled into June and now it’s August and its fairly quiet,” she continued.
According to UrbanDigs the real-time listing/residential analytics platform’s July report “contract signed activity up but still depressed, +93% month-over-month, and -39% year-over-year.” On the seller side, UrbanDigs reports, an “uptick in listings taken off the market suggests fewer real sellers than feared.” Chajet confirms this, “I had a few listings on the market which I advised my sellers if you are not desperate then take them off for now.” Some sellers who want an income and may have another residence are renting out their homes.
Is this a good time to buy for those committed to living in the city? According to UrbanDigs, “discount for post-COVID negotiated deals averaging 10-12%.” Chajet points to buyers “who live in the suburbs of Westchester, Long Island, and Connecticut with grown kids who see this as their opportunity to move into the city.” Conversely, families who were considering leaving the city saw COVID push them out the door.
Michael J. Franco associate broker and former attorney with Compass works around the city in all price ranges. “The buyers that are out there think they will get a good deal. At the same time, I’m having the conversation with many sellers about doing long-term rentals,” Franco explains. “I'm telling my clients don't sell unless you have to.”
Those moving out of the city according to Franco are “families who are going to places like Rye and Greenwich.” The majority of buyers he’s working with in the city are interested in the under $1 to $2 million range. “I’m seeing singles or couples looking at studios or one-bedrooms. With properties going below listing prices and low-interest rates some can get into the market now where they could not before," he observes. In a higher price range, Franco recently put two deals into contract in the $4 million price point that was around 11 percent off the listing prices.
Allison Chiaramonte out of Warburg’s Madison Avenue office reports much of her current business is downtown. “I think people who are buying now see their future in New York no matter what.” Chiaramonte is seeing a pivot in what buyers want. “Some are moving away from larger buildings in favor of smaller boutique buildings with personal outdoor space and fewer shared amenities.”
As we head into the fall market and the unknown sellers and buyers sitting on the sidelines will be watching the numbers closely. “I grew up and have lived in New York all my life. I can say we will get through this,” exclaims Chajet. Words to live by.
via U.S. News
By Andrew Fortune | August 6, 2020
Denver is one of the most desirable cities in the U.S. The economy is strong, business is booming and the mountains are breathtaking. However, has 2020 shaken things up a bit?
A drive through central Denver quickly reveals an increase in tents, housing the homeless. There is also an escalating tension among residents about how to handle the COVID-19 pandemic, as well as Black Lives Matter protests.
For many, Denver is starting to feel like a different city than it was just a few years ago. At the beginning of this year, no one could have predicted that 2020 would have evolved into such bizarre circumstances.
With all of these developments, there was bound to be some impact on the local housing market. Using data from the local multiple listing service for the Denver area, REcolorado, here's what you need to know about the current state of the Denver housing market, and what you can expect in the future.
In 2016 and 2017, Denver had one of the hottest seller's markets in the country. Homes would have multiple offers and net far above asking price. Home sellers relished the opportunity to cash in on their equity with lightning-fast home sales.
In 2018, the seller's market began to slow down and continued to do so up until the first few months of 2020. In the second quarter of 2020, the number of available homes began to drop again.
Denver is still in a seller's market, but it's not the extreme seller's market the area experienced in 2016.
Let's also look at this from another angle: Realtors use the term "months of inventory" as a way to measure a market's strength. This term references how many months of sales a market can sustain if no new homes are listed for sale before it entirely runs out of inventory. For example, if a market only has two months of inventory, and no new homes are listed, then it would run out of homes within two months. Agents consider it a seller's market when there are less than four months of inventory.
At the height of the housing market crash, Denver had a 6.4-month supply of inventory. This was a strong buyer's market. It was a time when buyers had plenty of homes to choose from and could often get a great deal.
At the busiest peak of 2016, Denver had a 1.3-month supply of inventory. During this time, homes would sell in hours with a pile of offers. It was a crazy time for real estate agents. Things were moving at a furious pace, and high-pressure deals were happening all over the city.
Today, Denver has a 1.7-month supply of inventory, so it's still a seller's market. It may not be the same seller's market that we saw in 2016, but it still favors the seller. According to MLS data, the last time Denver was in a buyer's market was May of 2012.
You may hear real estate agents in Denver talking about the current "slowdown" of the last few years. But their slowdown is minimal compared to an actual collapse like we experienced during the Great Recession.
Homebuyers continue to have a hard time finding homes in certain areas of Denver, but many sectors have experienced longer days on the market than we saw in 2016.
On March 26, 2020, the governor of Colorado issued a stay-at-home order, valid through April 11. This mandate shut down all real estate showing activity for the first few weeks, and then later allowed showings with certain restrictions.
Many consumers were too concerned about the pandemic to think about their real estate needs. Real estate agents were waiting for clarity on how they should proceed with business. Eventually, the restrictions were lifted, and Realtors started selling homes again.
During this time, the Denver real estate market took a hit, but home sales bounced back after the stay-at-home order expired.
The demand for homes in Denver was too great for a slow down in sales to continue. People need homes, and the market can't be stopped.
In April, Denver lost nearly 1,350 home sales due to COVID-19 restrictions on businesses. In May, Denver lost an estimated 2,727 home sales. That's a combined total of 4,077 home sales lost in Denver due to the coronavirus pandemic.
From the chart above, it may seem like Denver took a substantial hit, but considering the circumstances, the city's real estate market held together quite well.
The real estate market in Denver started 2020 incredibly strong. As we venture into the third quarter, the market appears to be on track to finish even more robust than it started.
The median sale price in Denver peaked in 2018, but it's positioned to be higher in 2020 than it was in 2019, based on the current year-to-date statistics. The median home price in the city of Denver is $447,500 as of July 2020. It was $428,000 at the same time last year.
There is no indication that the demand for housing will slow down any time soon. As long as the need for homes continues to increase, the prices will continue to steadily rise. If the market does not slow down, the median price of a home in Denver will be around $470,000 by this time next year.
Looking at the chart above and the represented sales trends, it's hard to imagine prices dropping any time soon without some unpredictable event bringing it down. However, if we've learned anything this year, it's that the unexpected does happen.
Low interest rates continue to fuel the housing market in Denver. The Federal Reserve has made it clear that it does not intend to raise interest rates any time soon. If rates change, the local housing market will inevitably change as well. But for now, it's reasonable to expect the seller's market in Denver to extend through 2021.
The national economy is also a big question mark, as 2020 has seen our national debt skyrocket. The unemployment rate continues to be a lingering issue that has yet to be fully resolved. These challenges could have an impact on the Denver housing market next year, as well as that of the rest of the country.
The big question is, "how much of an impact will it have?" It's clearly too early to tell.
Copyright 2020 U.S. News & World Report
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