2020 has been quite a rollercoaster so far. COVID has altered real estate in some significant ways.
Showings were shut down completely for home sellers and buyers for several weeks in April and social distancing measures and new showing protocols have changed how we do showings, appointments, inspections, and closings.
All that being said, now that we have several weeks of market data behind us, we can start to see how the Front Range real estate market is faring in the midst of this pandemic.
2020 started out very strong with multiple offers on many homes, appreciating home values, and strong buyer demand. As the corona virus hit communities across the country, sellers here pulled their homes from the market, decreasing housing inventory further. Even through the time in which in-person showings were prohibited, we still heard about strong buyer activity in the market as buyers looked at and offered on homes after looking at virtual tours and videos.
While it’s still too early to tell what the long term impact will be on the housing market, let’s take a look at what the statistics tell us right now.
We just finished compiling the most recent numbers for Boulder County and the Denver Metro.
See below for market stats and analysis.
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) is up 2.7% 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, even through April of this year.
Louisville and Longmont are also up year-over year with a .4% and 2.4% increase respectively. Lafayette is down slightly at -1.6% year over year.
Median Sold Price- Denver, Arvada, Westminster, and Broomfield
Median Sold Price in Denver is now at $441,000, up 4.7% to this same time last year. This number is quite variable throughout the city, with the most attractive neighborhoods seeing higher appreciation, and less attractive neighborhoods with fewer amenities lagging behind.
The other communities on the outskirts of Denver, like Arvada, Westminster, and Broomfield, offer home buyers a good amount of bang for their buck and proximity to the mountains, while still keeping the commute to Denver a reasonable 30 minutes or less. We are seeing these communities performing very well year-over-year with Median Sales Price in Arvada up to $435,000 (up 4.2%), Westminster up to $383,250 (up 5%), and Broomfield up to $482,000 (up 6.9%).
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 increased year-over-year in Boulder County, meaning homes are being shown longer before going under contract with a buyer. The average number of days a home spends on the market in Boulder is now at 51 days, meaning from the list date to the closing date we see an average of 51 days of total list time. This number is up (18%) compared to last year.
This increase in Days on Market is likely due to the several weeks in which we could not do in person showings. Buyers were only allowed to view homes virtually and so some were hesitant about offering on a home that they hadn’t seen. Sellers who decided not to pull their homes off of the market during this time experienced a longer list time and that is now being shown in the numbers.
If Median Days on Market for a specified area is 51, that means a home is most likely for sale and being shown for about 21 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.
The Days on Market in Longmont is now at 46 days, up 9% from last year. The Median Days on Market in Louisville is at 43 days (up 5%) and Lafayette is now at 43 days (up 19%).
We expect these numbers to go back down now that showings are up and running again.
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 3 weeks before accepting a contract, sellers in Arvada, Westminster, and Denver could reasonably expect their homes to receive an offer more quickly- in 10, 8, and 12 days respectively.
Surprisingly, the numbers in Arvada and Westminster are actually flat year-over-year indicating the market did not really slow down much at all when we couldn’t do showings in those areas. This indicates 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 varied. The Months Supply of Inventory in Boulder is up 17% as compared to this time last year. Longmont is also seeing increased inventory as compared to last year (+4.8%). However, Lafayette and Louisville are actually seeing lower inventory year-over-year, at 1.6 Months Supply of Inventory and 1.9 Months Supply of Inventory, respectively. Since all of the inventory levels are still well below balanced market levels of around six months, we can expect to see high buyer demand and competition for the best homes in the best condition. It will be very interesting to see how these inventory numbers react now that sellers are more willing to list their homes, buyers are back in the market in full force, and we are able to do showings again.
Months Supply of Inventory- Denver, Arvada, Westminster, and Broomfield
The four cities of the Northwestern Denver area also show varied inventory levels. Denver’s Months Supply of Inventory is up to 1.7 Months (+6%) year-over-year. Broomfield and Arvada have decreased Months of Inventory at 1.4 Months and 1.1 Months respectively. Westminster is flat year-over-year. The months supply of inventory in the Northwest Denver area still indicates a 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.
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 the upcoming weeks or months?
The market statistics indicate that we are actually pretty close to what we would expect our normal spring market to look like. Median Sales Price is up year-over-year, Days on Market numbers are relatively low (especially since we had several weeks in which we could not show homes), and Months of Inventory indicate a Seller’s Market in Boulder County and the Denver metro. Buyers can expect the best homes in the best condition to have strong demand and competition. Sellers can expect strong showing activity and may get multiple offers as long as they are priced competitively.
As for how our market will perform long term through this pandemic, that remains to be seen. However, our local economy is relatively well positioned if we do go into a prolonged economic downturn nationally. For the time being, the show will go on- just with masks, gloves, and lots of hand sanitizer!
As always, if you have more questions, don’t hesitate to reach out! Until next time!
Allison and Ken
** Some information about the stats listed above: All sales data listed above was taken from the two local Multiple Listing Services, IRES and Matrix. Reported sales were not all listed or sold by Ken and I, or by the other brokers in our office, but rather they represent sales of all local Realtors as shown by IRES and Matrix. The stats reported are intended to show trends in an area, and shouldn’t be used to price individual properties. If you have questions about the market value of your home, don’t hesitate to reach out for a more in-depth market analysis of your neighborhood.**