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June 2021 market stats with ideas and observations

This year vs last year, just for June

• Inventory continues to be off 50% from this time last year
  • 3,100 listings now
  • That’s up 50% from May 31, but the numbers are so small, I don’t think it really matters much
  • 31,900 listings in Jun 2006 (Denver had a much smaller population then, too!)
• Number of closed deals was about level (just off -1%)
• Average price up 27% and median price up 22%
• Average days on market down to 10 (another big reduction, was 25 days on market in June 2020)
• Showing traffic is cooling down
• Average home sold at a 5% premium to ask price. (June 2020:  0.3% discount)

The number of under contract at 6/30/21 was off 9% from similar time in 2020.  This stat + fewer showings + fewer new buyers applying for mortgages lends support that the worst of this is likely past us.

Year to date

• 35,000 new listings this year is not too far off the historical range (36,000-40,000)
  • However, I think there is pent up demand to sell
  • Some sellers, afraid they might be homeless, might bring their home to market when the headlines start saying things are slowing down and getting easier for buyers
• 29,800 units closed so far this year (compares to historical range of 25,800 – 28,500)
  • We’re selling lots of homes despite the frustrations
• Average price overall this year up 21% from 2020 and 23% from 2019.
• Average premium (instead of discount) so far this year is 3.9%
  • All of the stories of homes selling for $100,000 over asking in a bidding war are the exception, not the rule

Please note that the overall trends here mirror the long term average.  Inventory is typically at lowest in Denver in February, and reaches a peak in June-September.  Historically, the spring is the best time to sell and the late summer is the best time to buy.  On a relative basis, I think that will be true this year too.

For your landlords

• Denver rents were up 5% in April 2021 vs April 2020.  I think rent growth will be healthy for the next year or so at least.  We added 50,000 more citizens over the past year!  Where will they all live?

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

Number of New Buyers is Slowing

Here’s the newest data for new buyers applying for a mortgage.  Well below 2020 levels and even below 2019.  Time to let some steam out of the market.

Mortgage applications (roughly in line with 2019 levels):

Home Price Appreciation 2021

For the overall US, prices are likely to continue to increase at a strong clip for a few more months, but I’d guess it’ll slow down by fall.

The AEI’s Housing Center projection for home price appreciation:

Denver Housing Trends June 2021

Showing per active listing trends for Denver

Denver followed a similar pattern to Colorado Springs: 14 showings/active listings.  That’s off a lot from the peak in February 2021 of 22 showings (crazy!).  Still, it’s above the historical average of 8-11.

This shows that we’re making progress to getting the market cooled off.

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DDD: “Out of State” Investing an Hour Away From Denver & Market Trends in Denver and the Springs