Metro Denver housing market surprises with record-setting year despite pandemic
Metro Denver’s housing market ended 2020 with a bang, popping the roof with a record-high number of home sales and busting through the basement with the fewest listings available for sale, according to an update Wednesday from the Denver Metro Association of Realtors.
From the high-end to the low-end of the market, activity was robust, despite a recession and the country’s worst health crisis since 1918.
“This year has shown us that forecasting the future is nearly impossible, but it is clear that we will be starting off the year with historically low inventory, high buyer demand and low-interest rates,” said Andrew Abrams, chairman of the DMAR Market Trends Committee, which prepares the monthly report.
Buyers closed on a monthly record 4,807 homes and condos in December, which contributed to a record 62,985 homes purchased across 2020.Sales were up nearly 7% from 2019, and had sellers listed more homes, even more closings would have taken place.
The year ended with only 2,541 listings available, a 25.6% decline from November and a nearly 50% drop from December 2019. It marked the first time since DMAR started tracking statistics that the Denver market has ever dropped below 3,000 residential listings.
Buyers only had a fifth of the 12,941 listings averaged in December since 1985 available to them. Homes flew off the shelf and buyers unable to get a property under contract were handed a bag of coal and left clinging to a faint hope that 2021 might offer more supply.
The median price of a single-family or detached home sold was $507,000 in December, a decline of 0.6% from November, but up 12.9% on the year. The median price of a condo sold was $332,000, a 0.9% decline from November, but up 7.1% on the year.
“On first glance, the current Denver metro real estate data can feel staggering for potential buyers,” said Lawrence Yun, chief economist at the National Association of Realtors, in comments accompanying the report.
But record-low mortgage rates, engineered by the Federal Reserve, have resulted in monthly housing payments being more affordable now than they were a year ago even with the nearly 13% rise in detached home prices, Yun said.
The problem for many home hunters is finding something to buy, rather than being able to afford it.
Normally in a down economy, the sale of luxury homes, those priced above $1 million, take a hit given the limited pool of buyers. But that wasn’t the case last year, with luxury home sales up 34.8% in December as buyers sought more space and less crowded neighborhoods.
“There was a wave of Denver transplants who rushed to the Mile High City seeking a different lifestyle with virtual work opportunities that opened up new possibilities,” said Libby Levinson, a member of the DMAR Market Trends Committee member and local Realtor, in a release.
The pandemic did diminish buyer interest in condos and townhomes, especially in denser neighborhoods like downtown Denver and Cherry Creek. Back in December of 2018, there were 2.5 detached homes listed for every attached home. But in December they were nearly on par, with a difference of only 91 listings.
The median price gain for condos was also just over half that seen for detached homes last year and condo listings were spending 50% more days on the market in December than single-family homes.