The underlying 2021 theme of this seller’s market is that buyer demand continues to stay hot, even as many buyers continue to be iced out in this fast-paced market.March 2, 2021
In February, the Greater Denver Metro housing market proved that the underlying theme of this market is speed: speed at which buyers are purchasing relative to the number of sellers listing, and the speed at which active properties are going under contract while prices are accelerating.
While many metrics still show detached properties are in higher demand than attached, that gap decreased in February. There were 3,641 closed properties, up 3.70 percent from last year at this time, and in part because attached properties were on the rise. Attached properties saw a 16.29 percent increase in closings relative to last year at this time. The increased demand for attached properties propelled the market to an average close price of $401,552. This is the first time the attached market has had an average price above $400,000. Meanwhile, detached properties saw a 1.80 percent decrease in closed properties relative to last year.
The report additionally confirms that with median days in the MLS at five, close-price-to-
list-price ratio 101.90 percent, and months of inventory at 0.55, competition remains incredibly high. With properties frequently going over asking price, full appraisal gap waiver appreciation continues to rise. Savviness, creativity, knowledge and guts are all components that will help buyers move towards a path of homeownership in this market.
“The question currently is what will it take to get to a more normalized market?” said Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver REALTOR®. “Seasonality, vaccines and interest rates will be a few of the best indicators. As more of the population gets vaccinated, we may see increased listings throughout the summertime. Most importantly, if interest rates start to increase, that may decrease buyer demand changing the quantity of multi-offer situations. While no one has a crystal ball, using market indicators, creativity and perseverance will help buyers succeed 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).
February showed no signs of slowing down in the Luxury Market with some interesting trends at hand. Overall, numbers show an excellent month for luxury real estate in Denver with an incredible 446 sold homes year-to-date. That represents a 62.77 percent increase in sales overall from February 2020.
Last month, the luxury detached market alone closed on 206 homes, a 10.75 percent increase in this category from last month and a 46.10 percent improvement from last year. More buyers are ready to purchase property over $1 million than the market saw in 2020 and single-family home sellers are enjoying a more crowded and hotter marketplace. While less competitive than other market segments, it is still fierce with February’s close-price-to-list-price ratio at 97.63 percent.
Conversely, an interesting trend appears in the attached market with the number of closed residences down from 29 sales in January to 25 in February. This was still more sales than in 2020, which was only 15 total for February. However, the attached market was also experiencing a much longer time on the market; it is up 337.50 percent from the previous month. In January, there was a median of eight days in the MLS, and in February, it jumped to 35 days.
“Attached market homes that are “picture perfect” and marketed properly are selling quickly and for a higher price,” said Jenny Usaj, DMAR Market Trends Committee member and Metro Denver REALTOR®. “What we’re noticing is that if the residence requires work, it sits longer on the market than we have seen in the past.”
The good news for luxury attached homebuyers is that you have options. Sellers should take their time to prepare the residence, and REALTORS® need to market appropriately rather than rushing to get the property on the market. It is essential to set the timeline of expectations for the sellers and establish a showing schedule that will work with their lifestyle.