Denver Real Estate Market Pulse – June 2021
The number of showings and offers may have seen a slight decline since the early Spring boom, however the market continues to be strong with houses continuing to sell above asking price. Home buyers are now having to limit their search criteria to homes under their budget to adjust for competition in the market.
Home buyers aren’t the only ones having to make adjustments for pricing. With the increased cost of lumber, builders are having to adjust their pricing on a weekly basis. Since last year the price of lumber has basically tripled, and we have also seen hikes in steel and concrete pricing. As a result, prices for new homes will have to absorb the changes.
Parker, Colorado is located 25 miles south of downtown and was rated number 2 in Money.com’s 2020 Best Places to Live. With the spill over from the downtown area, the area has seen significant growth. Parker boasts such luxuries as mountain views, a strong local economy and open space, and as noted above, it is a short drive from the city.
New Trend for Lot Purchasing
Due to the demand for new homes, we may see a new trend when it comes to purchasing a lot – auctions. For example, the remaining lots in Wild Plum subdivision will be auctioned to the highest bidders rather than standard pricing.
Lot auctions are already frequently practiced in Arizona, and if the influx people moving from out of state continues, it could become commonplace in Denver area developments. If this trend continues, it could drive up prices further in an already rising market.
Is buyer fatigue setting in?
Buyer Fatigue is starting to set in for many who are searching for their dream home. It’s real, and almost everyone in our market is feeling it. People are starting to ask themselves: How many weekends do we have to go look at properties and submit offers? The lucky ones can move within a matter of weeks. However, it seems the standard for most people is searching for several months and submitting anywhere from 5-10 offers – then hoping one sticks. The Denver market is now like a marathon, with buyers often growing tired during the process. Many buyers just don’t possess enough juice to make it to the finish line.
Those buyers who are lucky enough or persistent enough to find their home could be rewarded by rapid price increases. According to Gallup, only 40% of respondents believed the real estate market would continue appreciating at this time last year. However, this year, nearly 71% expect home prices to grow.
Our Advice for Home Buyers
Whenever I take clients to look at homes for the first time, I let them know that it will take about 6-10 showings on average to get a good feel for their needs and wants – and how those match up with the inventory we are going to see on the market. There are many styles and floorplans that will pop up repeatedly, so don’t get discouraged if you miss out on a home design you really like. It takes “a little” time and experience to digest customer feedback and create the best plan of action for the buyer.
Very rarely do you win the first offer you make on a house. It can happen sometimes for a lucky few, but with the level of competition in this market, you should expect the process to take some time. So, we reiterate, don’t get discouraged by the process. In our experience, those who persevere will find the right home in the end.
Denver Luxury Real Estate Market ($1 Million Plus)
In this low interest rate environment, the demand for luxury homes seems unstoppable. So far this year, homes in the luxury market have averaged fewer days in the MLS and higher sales volume than either of the previous 2 years. For single family detached homes, May ended with over 20% more properties under contract than the month before and 70% more than last year.
In the attached segment, it seems that Denverites are beginning to start sharing spaces again. Last year, with fear of the pandemic and riots downtown, attached home sales came to a screeching halt. This year, sales are up nearly 7 times last year’s numbers!
Denver Signature Real Estate Market ($750k – $999k)
Not even the rain in May was able to put out the fire in the Signature Market. We did see a noticeable inventory increase for detached homes with 640 new properties on the market, which was a 9.3% increase from April and 30% year over year. The buyers gobbled these listings up with 645 going under contract. The average days in the MLS decreased from 33 days this time last years to just 8 currently.
In the attached segment, new listings were down 81 properties, or 24% from April with 100 new listings, an 8% decrease year over year. If you are looking for an attached home in the Signature market, pickings are slim.
Denver Premier Real Estate Market ($500k – $749k)
Last month the Premier Market boasted a year-over-year increase of 120% in closed homes. For year-to-date totals, so far in 2021 there have been over 2600 more homes sold than year-to-date last year – an increase of over 50%. Much of this can be attributed to homes that were formerly in the Classic Market that have now appreciated above the $500k plateau.
The conventional loan limit is now set at $595k, so it is easy to see how prices are surging upwards with the low cost of financing. Make no mistake about it, buyers are absorbing homes in the Premier Market at record pace. With 8600 new listings year-to-date, 8332 have gone under contract and 7736 of them have closed with an aver close-to-list-price ration of 106.27%!
Denver Classic Real Estate Market ($300k – $499k)
Some say we are experiencing an extreme inventory crisis in the Classic Market. However, numbers might suggest we are dealing with a demand crisis. In every segment, 2021 has seen more listings than any year since 2017. The issue is buyers are gobbling them up too fast for there to be a rise in inventory.
With the average home price at $623k, this segment is subject to over bids and waivers with an average sale-to-list-price ratio of 105%. Buyers should hope that the loosening of COVID-19 restrictions would lead to more listings while sellers hope to capitalize on low interest rates for their new home. Also, certain neighborhoods like Athmar Park and Arvada provide homes in this range, however many of them will likely need some sweat equity once they are purchased.
Contact the Property Consultants at Sophisticated Properties
At Sophisticated Properties, we’re more than just realtors™. So, if you are buying, selling, or looking to lease your luxury property in the Greater Denver Area, give our property consultants a call.
We can help you determine whether selling or leasing your luxury property makes the most sense. If you decide to sell or lease, we can provide quality buyers and tenants, and this makes life easy for you.
New To Denver?
Moving to a new city can be daunting! We can help make that process a bit easier by offering a Denver city tour.
One of our consultants will give you a personal city tour which will include showing up to 4 places that match the criteria that you set up for us.
This tour will include taking you through Denver's iconic neighborhoods, landmarks, stores, restaurants, and areas with public transportation. This tour is 3 hours long and cost only $350. If you lease one of our available properties, that $350 will be credited back to you when you move in.