Real Estate Agent
Denver, CO

Denver Trends for April 2020

Real Estate Agent
Denver, CO

Posted May 11, 2020 09:20

April's Market Update podcast is up. Listen to the podcast or read the blog post for all the details. In the next day or two, look for a special edition of the monthly market updates where I discuss rental payments (and non-payments) with four property managers around town.

April is the first full month of data with the COIVD-19 pandemic. In addition to the monthly market stats, I want to share some great data points from the Colorado Real Estate Journal's "Impacts from previous macroeconomic downturns." It's a great article on multifamily in Denver. Below are a few sections that I highlighted:

Here are the Denver MLS stats for the month:

The Denver MLS trends data for April 2020 is out. Comparing year over year (April 2019 to April 2020) is better than comparing the previous month, because we have defined seasonality trends.

ACTIVE LISTINGS

Pretty close to same as end of April 2019, -2%
- Homes -6%
- Condos +8%
However, with fewer buyers in market, the MOI (months of inventory) went up
- Still a seller’s market, more favorable to buyers at entry and mid prices (around 1.8 MOI for < $300K, which is up from around 1.0 MOI)
- Moved from slight seller’s market to slight buyer’s market in luxury
- YCRE defines luxury as $900K+, that’s the most expensive 10% of the market.
- This MLS report's top bracket is $1MM+, the MOI for that segment is 7.1… buyers market.

NUMBER OF UNITS CLOSED

Down 31% in April ’20 vs April ‘19
- Homes -28%
- Condos -37%
This makes sense; the slow down has been most pronounced under $300K (mostly FTB first time buyers) and top 10% luxury. Condos are skewed to more affordable product.
Mid-market ($300-900K) has been strongest
Dr. Yun, the economist at NAR, expects unit count for US to be down -13.5% in 2020 vs. 2019
- I suspect Denver will also be down, but not quite a much as the US average.

UNDER CONTRACT

Down -46%
Expect May closed volume to be off -40% to -55%
Unit counts will start to recover in June, assuming all of the Denver metro counties allow showings by mid-May.
Around six weeks ago, I expected 50-60% declines in May, so this is better than I had expected.

AVERAGE PRICE

Up 2%
- Homes -0.3%
- Condos +4%
I sent an email a few weeks ago predicting a decline in house prices due to "mix variance."
- That is, we’re selling fewer luxury homes than we used to, so the average goes down...
- ...Even though the "typical" entry level home price still went up.
- That (barely) happened this month. Expect to see it for a few more months.
- The media will lose their mind over this, which may unnecessarily alarm clients.
- You'll need to be the voice of reason to explain what the media is incapable of explaining.

MEDIAN PRICE

Up 5%
- Homes +3%
- Condos +7%
If you arrange every sale in order from cheapest to most expensive and take the value of the one exactly in the middle, you have the median price.
In times where you have mix variances, the median price is a much more accurate representation of what is really going on than the average price.
Condos prices were up more than homes due to a reverse mix variance.
- First-time buyers have really retreated from the market.
- The % of condos that sell in the most affordable price brackets has dried up
- Plenty of mid-market ($300-900K) condos are still selling.
- Some of the slow down in luxury is there are fewer jumbo loan products for the time being
- There are not that many condos in "luxury" over $900K, so the softness in lux impacts homes more than condos.

DAYS ON MARKET

Down 31% (several days)
- Average 19 days for homes
- Average 23 days for condos

DISCOUNTS

Average home sold for 99.96% of list price
If you have a buyer writing on a home with <30 DOM, don’t expect a discount.
If > 60 DOM and if in a slow segment (< $300K or > $ 900K), push hard for a discount.

DISTRESSED PROPERTY SALES

In April there were only three bank-owned properties sold in the Denver metro. In 2010 there were 612.
YTD there are 26 short sales. During the same time in 2010, there were 1,191 short sales.

There are three ways to get the Denver Real Estate MLS Market Stats details: