As 2020 is now one for the books, we can assess how real estate played out last year on the Front Range and also start to make some predictions for what the 2021 real estate market might look like. We just finished compiling the most recent numbers for Boulder County and the Denver Metro. Read on below for an in-depth analysis of market conditions and our January Real Estate Market Update.
Median Sold Price
The statistic on top of most buyers and sellers minds is the Median Sold Price. The Median Sold Price statistic shows whether home values in an area are increasing or decreasing as compared to previous years.
Median Sold Price- Boulder County
Median Sales Price in Boulder (when considering both attached and detached homes, and using 12 months of rolling data) is up 2% year-over-year. This metric shows us that while sales price increases have slowed from the extremes of 2015 and 2016, the city is still experiencing an appreciating market.
Louisville, Lafayette and Longmont are also up year-over year with 5.5%, 7.4%, and 7.2% increases respectively. As we can see in this data, the more affordable areas of Boulder County saw stronger year-over-year increases.
Median Sold Price- Denver, Arvada, Westminster, and Broomfield
The Denver metro real estate market continues to perform strongly. Denver has a varied and strong economy and is the economic driver of the Front Range.
Median Sold Price in Denver is now at $470,000, up 9.3% to this same time last year.
The western suburbs of Denver also continue to appreciate at a fast clip. We are seeing Median Sales Price increase in Arvada up to $470,000 (up 9.6%), Westminster up to $406,000 (up 7.4%), and Broomfield up to $495,000 (up 4.2%).
Median Days on Market
The Days on Market metric shows us how many days it is currently taking for homes to get from the first day of their listing to the closing table.
We have two local Multiple Listing Services in this area and they show Median Days on Market differently on their platforms. The Northern Colorado Multiple Listing Service (IRES) shows Median Days on Market calculated as the total amount of time a home is listed (from day 1 to the closing day). The Denver Metro Multiple Listing Service (Matrix) shows Median Days on Market calculated as the total amount of time a home is listed before accepting a contact, so we have to take this into account when we are considering this data.
Let’s look at the northern Colorado data first.
Median Days on Market- Boulder County
As you can see from the graph above, the Median Days on Market have decreased year-over-year in Boulder County, meaning homes are being shown for shorter amounts of time before going under contract with a buyer. The average number of days a home spends on the market in Boulder is now at 47 days, meaning from the list date to the closing date we see an average of 47 days of total list time. This number is down (6%) compared to last year.
If Median Days on Market for a specified area is 47 days, that means a home is most likely for sale and being shown for about 15 days, then the seller of that home is accepting a offer from a buyer, with the Under Contract period being about 30 days so a buyer can do their due diligence and close on their loan. This number is highly variable between properties. While some homes may fly off the market with multiple offers, others may sit for longer, especially in the upper price ranges.
The Days on Market in Longmont is now at 39 days, down 8% from last year. The Median Days on Market in Louisville is at 42 days (down 2%) and Lafayette is now at 38 days (down 9%).
Now, let’s look at the data from the Denver metro.
Median Days on Market- Denver, Arvada, Westminster, and Broomfield
This graph is showing us the Median Days on Market, calculated from the day of listing to the day a seller accepts a contract. You can see that the Days on Market for the Northwest Denver area is slightly faster than in Boulder County. While a seller in City of Boulder may expect to show their home for about 2 weeks before accepting a contract, sellers in Arvada, Westminster, and Denver could reasonably expect their homes to receive an offer more quickly- in 5, 5, and 8 days respectively.
These fast Days on Market metrics indicate very high buyer interest and buyer demand in these areas.
Months Supply of Inventory
Another metric Realtors use to evaluate market conditions is the “Absorption Rate”. This number is the months of supply of listings currently on the market. It lets us compare how many listings we have to how many buyers are in the market. An Absorption Rate of 6 months means that if no new listings were to come on the market, all current and active listings would be sold within 6 months. This is what we consider to be a balanced market. An Absorption Rate of below 6 months indicates a Seller’s Market.
Months Supply of Inventory- Boulder County
Inventory levels in Boulder County are quite low. The Months Supply of Inventory in Boulder is down 19% as compared to this time last year. Inventory numbers in Longmont, Lafayette, and Louisville are down significantly year-over-year as well. Since all of the inventory levels are still well below balanced market levels of around five to six months, we can expect to see high buyer demand and competition for the best homes in the best condition.
Months Supply of Inventory- Denver, Arvada, Westminster, and Broomfield
The four cities of the Northwestern Denver area all show significantly lower levels of inventory than this time last year. The Months Supply of Inventory numbers in the Northwest Denver area still indicate a sizzling hot Seller’s Market. The best homes in the best condition should see strong buyer demand and receive multiple offers and offers over the list price. This is in line with our recent experience with buyers in these markets.
January Real Estate Market Update: So what do all of these numbers tell us about how our market is faring in the midst of COVID-19? What might Buyers and Sellers expect in 2021?
From our January Real Estate Market update, keep in mind that as we head into 2021, market statistics indicate that strong buyer interest, continued positive net migration to our area, low-interest rates, and low housing inventory likely point to a continued hot housing market. These market conditions remain true throughout the Front Range.
Buyers can expect the best homes in the best condition to have strong demand and competition. Buyers will need to be quick and prepared to compete.
Sellers can expect strong showing activity and may very well get multiple offers as long as they are priced competitively and they prepare their home well for sale. Sellers should stay cognizant of continued showing restrictions due to COVID and many are finding the best way to sell their home is to move out completely before showings begin.
This year promises to be a busy and competitive year for buyers and sellers on the Front Range. If a home purchase or sale is in your future and you have questions about how to get prepared for this, we are happy to be a resource for you. Don’t hesitate to reach out with your questions! Until next time! Thanks for checking out our January Real Estate Market Update!