May 2021 proves that even buyer fatigue cannot stop Denver Metro area buyers from slowing down or giving up, with increased opportunities rising in an extreme market.
In May 2021, the data demonstrated that while it is an extreme seller’s market in the Metro Denver area, closings are still happening, up 18.78 percent, despite active listings being down 4.11 percent year-to-date from 2020. At the same time, the report showed that closings are up 18.78 percent, an extreme statistic that is both a reflection of how the pandemic shutdown impacted the real estate industry last year at this time and yet also supports the concept of increased buyer demand.
Throughout 2021, the Metro Denver area has seen cracks in the attached market while the detached continued to rise in urgency and price. In May, buyers saw those cracks and moved on a relative opportunity in the attached market creating the lowest month-end active inventory on record, with only 739 properties available to sell. Those cracks are now gone, and it is a strong seller’s market for every property type and price point.
The Denver Metro’s 2021 real estate market has turned into an unpredictable year, lacking seasonal consistency with rainy weather in tow, while prices continue to skyrocket. The area hit a new average sales price record of $700,559 for single-family detached properties.
“Buyer fatigue is the most prevalent conversation within REALTOR® circles right now,” said Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver REALTOR®. “Like a marathon, buyer fatigue has slowed people down but has not stopped anyone from crossing the finish line. Interest rates continue to be relatively low and consistent. Listings continue to slowly hit the market, while buyers continue to gobble up properties as soon as they do. Just this weekend, I wrote one offer in the $400,000 price range that had 40 offers and one in the $1 million price point that had double-digit offers. Many felt 2020 would be an outlier, while 2021 was supposed to feel different. A direction of resiliency, strength and the possibility of fun was on the horizon. For sellers, the latter has proven true while buyers continue with themes of resilience and strength to overcome this tough seller’s market.”
The report also showed how the transition in month-end active inventory from April to May has been consistent for the past 13 years. Each report always concludes that month-end active inventory goes up, even if it is as few as 41 properties in 2011 to as many as 1,879 in 2019. In 2021, each month’s data indicates it is not the case. Month-end active inventory not only went down last month, but it went down 20.01 percent. This outlier of a stat can be explained by two things: overall listings are down and buyer demand is up. With competition continuing across all price ranges and static inventory scarce, it is likely records will continue to be broken in this hot market.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999).
Turning to the Luxury Market, the June report shows that today’s low interest rates, compounded with the savings from the pandemic closures, have created a demand in the luxury segment that is unprecedented in Denver. In both the attached and detached markets, the Metro Denver area has higher sales volume and homes have fewer days in the MLS than in 2019 and 2020.
The detached Luxury Market closed out the month of May with 21.12 percent more properties in pending status than last month and 70.61 percent more than last year. Meanwhile, the attached Luxury Market statistics were more impressive, closing 687.50 percent more than last year, likely a testament to the restrictions being lifted and the hope buyers read in the media about the pandemic.
The attached data sheds light again on how Luxury townhomes and condos came to an abrupt halt last year, due to fear around sharing spaces, the riots downtown, and concerns about the pandemic. However, in May, the data shows that Denverites are ready to start sharing spaces again.
“Looking back at where we were last year versus today takes your breath away,” said Jenny Usaj, DMAR Market Trends Committee member and metro Denver REALTOR®. “By all accounts we are selling more in the Luxury Market. This leads one to ponder inventory shortage. While we are not in a balanced inventory market, there are more sales taking place than years in the recent past, an increase that is also a product of the low interest rates and access to financing.”
If one were to look at the attached Luxury Market 2019 closed sales, they would read the closed sales for May ended with 109 residences. In 2021, the Metro Denver area was at 223 total. This segment of the market has surpassed the 2019 data, which was the highest in the last five years. The same trend is true for the detached Luxury Market. In 2019, May closed out with 826 residences sold, and this year we are at 1,642 total.
Ultimately, this month’s report shows that buyers are making decisions faster than ever before. In 2019, the detached market residences were available for tours for 20 days before accepting an offer. Last month, that same metric measured median days in MLS as six. The attached market is seeing the same trend, from 23 days in 2019 to seven days this year. Even if one were to take out the pandemic pricing and anomalies of 2020, the Metro Denver area is still seeing properties for less days in the MLS from 2019. The report concludes in the Luxury Market that when a home or condo is prepared for sale, priced properly and marketed, a buyer must be ready to move at record speed if they want to compete in the Luxury Market.
