Denver Real Estate Market Pulse – March 2021
According to recent data provided by the Denver Metro Association of Realtors [DMAR], ‘Month End Active Listings’ shrank another 12% from the previous month. This figure describes the number of listings that are currently on the market at the end of the month.
The following graph represents the historical Month’s End Active Listings from January ’08 to present. The traditional model states that, with the current absorption of homes, the line between a buyers’ market and a sellers’ market is around 16,000 active listings.
While the active inventory has decreased, the number of closed homes has increased 13% from the prior month and 3% year-over-year to 3641 closed homes in February. In other words, while new listings are coming on, they are being absorbed at a higher rate than years before. As a result, the average closed price has climbed to $553,000, an increase of 1% from January and 3.7% year-over-year.
With such low inventory, it has never been more important to get creative with offers to get your contract accepted. That’s why we’ve created some tips to make your new home offer stand out in a multiple offer situation.
There are two frequently asked questions: Is this sustainable, and are we in a bubble? While I wish I had a crystal ball, I think the questions should be “What will it take to get to a more normalized market?” Vaccines and interest rates, along with typical seasonality, are some factors to keep an eye on as well as the rush in migration from typically costlier coastal cities.
It is possible that we may see an increase in inventory as the population gets vaccinated throughout the summertime. It is also possible that rising interest rates will put a damper on buyers’ appetite to overbid, which could change the dynamic of multiple offer situations. However, creativity and perseverance will help you succeed in today’s market.
Denver Luxury Real Estate Market ($1 Million Plus)
The Luxury Real Estate Market is continuing its surge. In February, 206 luxury detached homes sold, an increase of 10% from January and a 46% increase from last year. It seems that more buyers are ready to make the leap over $1M.
While less competitive than the other market segments, the close-to-list-price ratio is still a healthy 97.6%. This segment has the highest months-of-inventory at 1.7 for detached homes and 4.0 for attached. For reference, a normal market is 6 months. The highest priced home in February closed at 5.99M, which was a 10,000 square foot home in Country Club with 6 beds and 9 baths.
Denver Signature Real Estate Market ($750k – $999k)
In the Signature Real Estate Market, it is a great time to be a seller! With a median day in the MLS of five, buyers are out in full force. Typically, a home is listed on a Thursday, shown through the weekend, and offers reviewed on Monday.
Year-to-date listings are not too far off pace from 2020 or even 2019, however pending home sales are up 45%. This indicates that more buyers are ready to write offers than this time in the previous year. However, there is a tale of two markets here. Detached homes have .34 months of inventory and a close-to-list-price ratio of 102%. On the other hand, attached homes have 1.02 months of inventory and a close-to-list-price of 99%. While both are still clearly in a sellers’ market, this indicates a softer market for attached homes than for detached.
Denver Premier Real Estate Market ($500k – $749k)
Demand has continued to outpace supply in the Premier market, driven by the low interest rates and increase in the conventional loan limits for Denver to $595k from $575k. February saw an uptick in new listings of 15% for detached homes and 6.5% for attached. However, this was quickly gobbled up with 1330 homes going under contract.
Buyers in this segment paid an average of 103.3% making this the highest close-to-list-price ratio of any price segment. The premier market has only .34 months of inventory for detached homes and 1.02 months for an attached home, meaning buyers need to be aggressive on prime properties. As properties begin to close and reflect the appreciation of market value, some buyers will be priced out of the markets they were comfortable in just a month or two ago, and sellers will start to see fewer offers at 10 – 20% over list price.
Denver Classic Real Estate Market ($300k – $499k)
Buyers that won homes in this market last month had to pay up due to slim pickings. New detached home inventory is this segment was down 23% year-over-year, mostly because many of the homes moving into the premier market. On average, buyers paid 3.1% above list price to secure their home in the ‘Classic’ market, an average of nearly $10,000.
Properties in this range often receive 50+ showings and 10+ offers, so it is important to put your best foot forward on prime properties. While these homeowners paid more, they got less for their money with the average price per square foot jumping 19% year-over-year to $261 psf. To purchase real estate in this price range, buyers must give it their best and not lose hope.
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.