New homes for sale was 14% higher last week than the last 3-year average with 1,447 homes hitting the market. Eventually, this increased seller activity may lead to rising inventory levels and a slowing of home value appreciation in the Denver metro market.
But not yet.
Last week saw 44.6% more homes go under contract than the last 3-year average, hitting the mark of the 6th busiest week of 2020 at 1,515 homes.
Average Sales Prices, Up
Once again, this supply and demand phenomena in Denver real estate is driving up prices.
The average weekly sales price of a single-family home was $628,236 last week, 6% higher than just a week before. The average weekly sales price of all residential property types was $558,036, 5.7% higher than the previous week.
Note: We expect fairly significant fluctuation of the average weekly sales price going into a seasonally slower time of year and the contentious election season.
Showings – Greatest Indicator of Short-term Appreciation
The likely continuation of this trend is supported by the volume of buyer activity.
Total showings last week was 20.4% higher than a year ago at 24,923 in person property viewings. Showings per home for sale was a staggering 77.5% higher than just one year ago.
This is the greatest current indicator of continued home value appreciation because it is the greatest measure of demand.
The Crystal Ball
The US economy has seen signs of a “V-shaped” recovery after the pandemic shutdown. The US jobless rate has dropped to 7.9% as of the end of September, from a high of 14.7% in the heart of the pandemic, beating most predictions.
But many economists argue about US economic stability given government policies and conflict, social unrest, resurgence and subsequent reaction to the virus spread, children schooling from home, trade war with China and the election season. The variables are significant and while there are many guesses, no person can tell us what the future holds.
However, while the US economy and the host of other factors nationally are important, what impacts our decisions about real estate in the short-term is Colorado based information.
The Denver metro population has grown by another 1.33% YTD (end of August) compared to 1.34% all of 2019. Colorado unemployment is outpacing the national average at 6.7% after a pandemic high of 12.3%, with some expecting pre-pandemic employment levels by end of Q1 2021. And, Colorado remains one of the top ranked state economies in the country and continues to be rated as one of the most attractive places to live.
While those who have lived in Colorado for some time may not love the increased traffic; the continued stability of the local economy, lowering unemployment, low interest rates and economic strength are good signs for the Denver metro and front range real estate markets for the foreseeable future.