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Spring in Summer
This year the Spring market is occurring in the Summer.
Typically the busiest months for real estate along the Front Range are April, May and June.
This year, because showing activity was restricted in the Spring months, we are seeing robust activity this Summer.
Here’s an indicator. Sales through July 2020 versus July 2019 are up:
12.6% in Metro Denver
13.7% in Northern Colorado
To see double-digit increases in sales despite was is occurring in the National economy, is nothing short of remarkable.
Not Taxing
Pop quiz…
Which state has the lowest effective property tax rates?
It’s not Colorado. But, if you guessed Colorado you’re close!
Hawaii has the lowest effective rate at .27%.
Colorado is ranked 3rd at .53%.
New Jersey is the highest at 2.47%
So, Colorado’s property tax rate is one fifth of New Jersey.
It’s also one third of Michigan and Ohio, and one half of Oregon and Washington.
The out of state clients we work with are usually pleasantly surprised that our local property tax rates are so much lower compared to where they are moving from.
It’s another benefit of owning real estate here.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.
Caught Up
We’ve been waiting for June to catch up. It finally happened (almost).
Back in April, real estate activity was significantly limited and the showing of property was restricted which caused the number of closed properties in May and early June to be much lower than last year.
Bottom line, fewer properties going under contract in April caused fewer closings 30 to 45 days later.
Closed properties in May were down compared to 2019 by 44% in Northern Colorado and 43% in Metro Denver.
Then activity jumped significantly in May. The number of properties going under contract was way up compared to last year.
We’ve been wondering when we would see this sales activity reflected in the number of closed properties.
Well, it finally happened (almost).
The number of closings so far in June compared to the same time period through June of 2019 is only down 1.8% in Northern Colorado and 1.6% in Metro Denver.
In both markets, there are only a handful of closings separating activity in June 2020 versus June 2019.
By the end of the month, when all the transactions are tallied up, we expect that June of this year will out pace June of last year in terms of number of transactions.
This is significant not only because of COVID-19, but also because of the reduced inventory compared to last year. Quite simply, there are fewer homes to buy.
All of this speaks to the health and resiliency of the Front Range market.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.
Rate Meaning
Mortgage interest rates have hit another record low this week.
Mortgage applications for purchases just hit an 11-year high.
Rates are at a level that many people could never have imagined.
Here’s something that is surprising to many people…
Rates are 1.5% lower than they were just two years ago.
Here’s what that means for buyers…
Pretend someone is looking at a $500,000 home and they will have a 20% down payment.
The difference in monthly payment is $320 between two years ago and today.
Obviously that is a significant amount of money.
Imagine what a person could do with $320 per month.
The fact that rates are at record lows is one of many reasons that the market is so strong right now and prices continue to appreciate at healthy levels.
Tight Inventory
The numbers that we find to be most interesting right now are all related to inventory.
Long story short, inventory is tight.
It was already tight pre-coronavirus and now it’s even tighter.
Here are the numbers.
Active properties for sale versus one year ago are down:
11% in Larimer County
20% in Weld County
26% in Metro Denver
This low inventory is one of several reasons that prices are generally still up across the Front Range.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.
Prices Still Up
It seems that COVID-19 did not cause prices to decrease and certainly didn’t cause them to crash.
Average prices are up compared to last year:
2.8% in Larimer County
5.4% in Weld County
3.3% in Metro Denver
Low supply, sustained demand, and incredibly low interest rates are all fueling the price growth.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.
Faster
Here’s something true about today’s market. Properties are selling fast.
Compared to one year ago, the number of days it takes for a property to sell is significantly lower.
The industry term is “Days on Market” or DOM.
DOM is way down.
Here is the comparison of May 2020 versus May 2019:
• Metro Denver down 22%
• Larimer County down 19%
• Weld County down 16%
Initially, this may seem counter-intuitive. How could homes be selling faster in today’s environment?
Here’s the deal. The buyers and sellers who are active in today’s market are serious.
There really aren’t ‘tire-kicker’ buyers out looking at properties just for the fun of it.
There really aren’t sellers testing the market to ‘see what they can get.’
For the most part, buyers and sellers are on a specific mission and this mindset is showing up in the numbers.
For sellers especially, this is no time to test the market and be overly aggressive on price.
Properties that are priced right and in good condition are selling and often selling fast.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed.
Pent Up Demand
We notice a very interesting dynamic in the market right now.
There was clearly a pent-up real estate demand created during the recent time when in-person showings were not allowed. The numbers back it up.
First, a little background. During a portion of “Shelter in Place,” all in-person viewing of properties ceased. Instead, buyers spent time online viewing virtual tours and 3-D photography.
Even though clients could view homes virtually, purchase activity did slow down.
Today, showings are allowed again as long as clear protocols are followed. We’ve implemented a Safe Showings program to keep our clients protected.
Now, to the numbers.
Through the first two weeks of May 2020, the number of closed properties is down compared to the same time period in 2019.
In most cases these closed properties are a result of purchase agreements that were written in April- a time when in-person showings were restricted.
So, a decrease in closings was expected.
However, the number of new written contracts so far this month is up considerably compared to the same time frame last year.
Specifically,
• Metro Denver closed properties down 47%
• Metro Denver new contracts up 6%
• Northern Colorado closed properties down 41%
• Northern Colorado new contracts up 19%
So, buyer activity is up compared to last year, even in our current environment.
This speaks to the resiliency of our market and the effect of low interest rates.
At Windermere Real Estate we are taking Safer at Home and Social Distancing very seriously. Our people are following our Safe Showings protocol, staying connected to their clients, and providing help wherever needed
What the Numbers Say
April represents the first time we can look at the impact of COVID-19 on a full month of real estate activity.
To no one’s surprise, activity in April in terms of closings and new contracts did slow significantly.
Much of this slowing was caused by in person showings not being allowed for most of the month. (showings are now allowed again by following Safe Showings protocols)
Here’s what the numbers say…
Closed transactions were down compared to April 2019
• 26% in Northern Colorado (Larimer & Weld)
• 27% in Metro Denver
New written purchase agreements were down compared to April 2020
• 48% in Northern Colorado
• 44% in Metro Denver
So, while activity did slow, there was nothing resembling a “screeching halt” that took place.
While the way property is shown has certainly changed, the market is still very active and we expect activity to increase even more with showings now being allowed again.
Special Event
On Wednesday April 22nd you are invited to a special online event with Windermere’s Chief Economist Matthew Gardner.
He will be giving his insights into the U.S. economy and what that means for real estate along the Front Range of Colorado.
You will hear the answers to the biggest questions we are hearing from clients now like “do you think housing prices will crash?”
This event is exclusively for clients and friends of Windermere Real Estate. To receive the registration link simply reply to this email or reach out to your Windermere real estate broker.
Many of you have heard Matthew speak at our Market Forecast events we hold each year in January. He is famous for making complex economic dynamics very simple to understand.
You will get useful and valuable information which will give you clarity about where the market is headed and when we can expect the economy to improve.
For example Matthew predicts unemployment to hit 15% by the end of June, but then to improve to 8% by year-end and 6% by this time next year.
Again, if you would like the link just reply to this email or reach out to your Windermere broker.
At Windermere Real Estate we are taking Shelter in Place and Social Distancing very seriously. Our people are working at home, staying connected to their clients, and providing help wherever needed.
