Most Colorado Tenants Made March Rent

A Denver Post article this week made these key points

• Only one out of 50 apartment tenants in Colorado failed to make the rent last month, and evictions are running at half of the pace seen before the pandemic.
• A 98% collection rate in March is a strong indicator of residents’ growing confidence in the economy.
• Colorado’s rent collection rate was running 98.6% in March 2020. Nationally, the rent payment rate was running 93.5% in February 2021.
• There were 1,742 eviction filings in Colorado last month versus 3,480 in March 2020. 

Key Takeaways from March 2021 vs. March 2020

Here are the March market stats and some ideas and observations. Lets look at March 2021 vs March 2020.

• Active listings
  • Down 67% overall
  • Homes down slightly more than condos
  • I had hoped to see an increase in inventory in late 2Q / early 3Q, but now I think that might be optimistic.  Maybe 4Q?
  • Historically, inventory increases between February to March; this year it did not.
  • We did brig 4060 new home listings and 1660 new condo listings to market in March 2021.
    • But both numbers were down from Mar 2020

• Closed listings
  • +1.2% overall
  • Home sales down a little, -3%, condo sales +11%
  • Condo sales had been off for a while, so that’s just a natural rebound
  • I suspect the COVID cloud over shared spaces is lifting, which might also be driving that

• Average price
  • +15% overall
  • Home +19%, condos +8%
  • Again, the MIX of what we are selling is part of this dramatic increase.
  • We have very few entry level homes/condos to sell and we’re doing a great job selling lots of luxury homes
  • Don’t be surprised if the average price goes down for a few months this fall when (if?) we have a return of entry level inventory
  • I do think the excellent run that lux homes have enjoyed will come to an end soon

• Median price
  • +12% overall

• Days on Market (DOM)
  • -37% (no surprise!)
  • Average 15 days for homes and 26 for condos.

What’s Next for the Denver Real Estate Market?

• New construction won’t bail us out
  • The usual four reasons
    • High commodity costs (esp: lumber, copper)
    • Scarcity of land that is build-ready
    • Increasing red tape to get permit approvals
    • Labor shortages
  • And three new problems
    • Builders are struggling with the cost of building materials ranked as the number one problem by the National Association of Homebuilders and availability of building materials ranked second. Local contractors are telling clients to order appliances a year in advance to make sure they arrive on time.
    • Is new construction the answer to our severe lack of inventory? It’s tough getting a new home as well. Many local builders have waiting lists with hundreds of buyers on them waiting to get a lot.
    • One of the big builders has started to build and rent out their properties instead of selling, tightening the ever competitive market we have today.
  • It’s likely not a bubble
    • There have only been two times in Denver’s history where home prices went down
      • Both occurred when it was a buyers market (e.g., months of inventory greater than six months)
      • We’re at 1 month of inventory or less
    • I do expect that the pace of appreciation will slow down once we stop selling so many lux homes and we get some entry level product to sell
  • Showings
    • There’s a problem with the data this month, so I still don’t have that chart.
  • Under contract
    • Up 24% from last year
  • New mortgage applications
    • About the same or better than last year
    • Despite the mortgage rate increases, buyers are still lining up to get ready to purchase

It all points to a difficult April-May for buyers and a continued party for sellers.

Source: The above executive summary is from Lon Welsh of Your Castle Real Estate.

Denver Housing Trends March 2021

Showing per active listing trends for Denver

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YouTube Video: Denver and The Springs Real Trends – March 2021

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