Buckle up Denver, we are in for a wild real estate roller coaster ride!
The Denver real estate market has changed a lot in the past 10 days!
I am confident we are going to be okay. Do not stress out.
Denver was ordered to “stay at home” on Monday, March 23, 2020. Colorado was ordered to stay at home on Thursday. Real Estate was deemed an “essential business” and so we are working hard for our clients. The real estate market is 17% of the GDP. Real estate is keeping the country going.
That doesn’t mean we are going out and showing 10 houses a day. It means the government and the banks are doing everything they can to get the homes that are under contract to close. It means we must be responsible and use unconventional ways of showing and listing houses. I am anticipating that Denver real estate we will be ordered a temporary stop in a couple of weeks and we will slow down during the height of the pandemic, but that doesn’t mean things will stop it will be a temporary slowdown.
The last update I wrote, was before the stay at home orders and we hadn’t seen a dip in showings yet.
As of Friday, we have seen a 34% decline in showings.
We expect those numbers to continue to decline. We want them to decline! A few people NEED to move, and we need to make that happen but everyone who WANTED to move right now must put it on hold for a few months.
Homes have been taken off the market, some have fallen apart before closing and some are still closing.
Eighty-eight percent of the loans are closing right now. We had a bumpy week the highlights from the lending side:
- FHA said you need to have a credit score of 680 to qualify.
- Jumbo and non-qualifying loans are in the midst of making changes.
All of these changes are good right now.
There will be some delays and some kinks, but they are protecting the market. Buyers need to be working with the right banks right now. It has always been important, but it will be more important than ever. Cash is cash and that makes everything easier.
A SLOWDOWN does not equal the crash we saw in 2008.
It is natural to go to the last negative experience and think it is going to happen again. But we aren’t where we were in 2008. In fact, this is a look at the last 5 recessions and then what happened to prices.
In 2008 we had 25,000+ houses on the market. And in 2019 we have somewhere around 6,000 houses on the market. If we do not have supply, the prices won’t drop.
30% of the homes in the US are paid for in 2019. We weren’t anywhere close to that in 2008.
Things are going to get crazy over the next few months and sometimes the roller coaster ride will make your stomach drop and take your breath away, but remember:
this is temporary.
Because real estate is driving the economy, once the uncertainty of the virus stabilizes, interest rates will drop again, they follow the 10-year treasury, and then we will take off again.
Buckle up Denver.
Let me know how I can help you with your real estate needs.
It will pay to be prepared, so let’s get started.