November Market Update
November 2020 in Denver saw record highs and lows in the Denver market. It is important to remember that the residential market generally follows a seasonal pattern and it is normal to see lower inventory in the winter months. Even so, November ended with 3,415 residential units on the market, with only 1,755 detached units. The demand is especially high for detached homes and the additional space that generally comes with them. The inventory of detached property is so low, that if no new detached homes were listed, and the currently listed homes continued to sell at the current rate, in two weeks, there would be no detached homes on the market. The last time inventory was this low was December of 2017, when many speculated that we were at the top of the market. It’s obvious now, that that was not the case and even with rising prices today, we have no reason to believe that November 2020 is the top of the market either.
Even with such low inventory, there are still a record number of homes being sold at record high prices. There were 4,820 closed transactions in November with an average closed price of $549,756. The previous record for November sales was set in 2019 at $486,012, an increase of 13%. About one-third of the current inventory is listed at over $1 million, making conditions especially competitive at lower price points. Even in uniquely challenging conditions, homes are selling and people are moving.
The one thing that continues to work in the buyer’s favor is favorable lending terms. Interest rates are staying low and lenders are offering competitive terms on top of that. This gives buyers maximum buying power. All these metrics, plus the seasonal nature of the real estate market, leads us to expect inventory to stay low through December. We don’t expect there to be a significant increase in inventory until the spring, but homes are still coming on the market.
If you are considering buying in 2021, January might be the perfect time to talk to your agent about your priorities. If you see yourself selling a home in the coming year, January is also a great time to talk to your agent about which thoughtful updates will payoff in the long run. For now, we send you wishes for a joyful holiday season and a new year full of peace.