First things first... if you are currently reading this, I likely owe you a THANK YOU! Thank you to the clients pictured, the clients not pictured, my referral partners, and all of you lovely people who supported my business in one way or another this past year. Thank you! I am sincerely grateful to have had my best year in real estate yet! Your referrals keep me in business and I cannot thank you enough for sending clients my way.
Moving on to what you're really here for...
2020 Market Recap
2020, a year we'll never forget! It was record breaking in a variety of capacities, but particularly within the housing market. However, let's focus on the 3 statistics that really helped to shape what the 2020 housing market looked like in Denver.
1. Months of inventory (MOI) - the number of months it would take to sell all of the homes currently listed for sale at the existing pace of the market. This metric is typically used to identify what type of real estate market we are in. In a buyer's market, there will be 6+ months worth of inventory - plenty of supply and low demand puts the negotiating power in Buyers' hands. In a balanced market, there will be 4-6 months worth of inventory. In a Seller's market, categorized by low supply, high demand, and Seller's holding the negotiating power, there will be less than 4 months of inventory.
In Denver, we finished December with a record low of 0.53 months of inventory. That's TWO WEEKS worth of inventory. If we look at the entirety of the year, 2020 leaves us with the lowest yearly average we have had in Denver of 1.05 MOI. Needless to say, Seller's held all of the power in 2020. (Source for stats: DMAR Market Trends Year End Review) We can confidently say that an increase in demand is attributed to the record-low mortgage interest rates we saw in 2020.
(Infographic source: DMAR Market Trends Year End Review)
2. Active inventory - homes currently listed for sale at a given point in time. For the first time ever, Denver fell below 3,000 active homes for sale at the end of December and landed at 2,541 active listings. This record was the result of a combination of closed listings increasing by 7% from 2019 (more homes selling) and new listings decreasing by just under 2% (fewer homes coming on the market). (Source for stats: DMAR Market Trends Year End Review)
3. Average closed price - the average price of sold homes. In 2020, we saw just under an 8% increase in the average closed price of homes in Denver from 2019 putting us at $525,185. With high demand (low interest rates) and low inventory, it should be no surprise that we continue to see consistent price growth in the Denver housing market. (Source for stats: DMAR Market Trends Year End Review)
(Infographic source: DMAR Market Trends Year End Review)
If there's one thing we know for sure about 2020 and housing, other than a record breaking year, it is that our relationship with our homes became more significant! I am sure just about every single one of us took a good hard look at the space we were/are quarantined in, and how it functions as a school, a home gym, a daily kitchen, home offices and beyond. Now the real question is, what are we going to see happen in 2021 as a result?
Looking Ahead to 2021
According to the DMAR Market Trends Year End Review, the housing market in Denver is expected to continue to perform highly in 2021. The main contributing factors are listed to be a net population gain in 2020, our job market is growing and recovering faster than other areas of the country, and the effects of being a popular Millennial destination. Millennials make up the largest percentage of movers (migration) and homebuyers. With record-low interest rates and more Millennials moving to Denver, demand will continue to be strong. Based on the inventory numbers of 2020, this high demand will be met with record low inventory, which will result in home prices continuing to grow.
Thank you for reading! I highly recommend you check out the DMAR 2020 Year End Review here for more information! Please reach out if you have any questions.
Chelsea Steen
Your Castle Real Estate
740.334.9898
chelsea@chelseasteen.com