The Denver housing market in March 2020 is not impacted by the recession that the country is in. It will be the third recession that has happened while I have been selling real estate. And it isn’t anything like either other the two before.
We are in a very delicate market right now.
I am on 3 conference calls per week, gathering information on what is happening in the market from a national level down to the Denver Metro Area so that I can keep you informed and focused on the facts.
One thing that is continually reiterated is that what is happening in the economy is not happening because of the housing market like 2008.
What I know for sure from firsthand experience is that in 2008 we had 25,000+ homes on the market in Denver. Right now, we only have 5,776. I look at this graph every month for the past 10 years and think how grateful I am that we are not there.
Be sure to look at my last update if you need a reminder of all the other reasons why this recession is not like 2008.
Buyers and seller who NEED to move can still move. Buyer and seller who WANT to move are probably on hold right now. We are in slow motion; we have not stopped. Buyers still have access to loans unlike 2008.
I’ve been watching the showings on all properties on purpose. I think the showings are the pulse of the market right now.
Since last week, we only dropped 1% on our showings. We have been in “stay at home” in Denver for two weeks, and so that makes perfect sense. The buyers who NEED to purchase are still looking at houses. Our total showings (on all listings) are down 66% since the peak Monday, March 6, 2020. We also had 10 million people in the country laid off from their jobs in the past 2 weeks.
On a side note, I normally say we need 18 showing to get to a close. That is my average over 20 years. On an update from Megan Aller with First American Title on Friday, she said that homes normally have 19 showings before an offer on average in the Denver housing market and then said that over the past month the average is 10. This means the showings right now are serious buyers.
A glance at what happened in March in Denver:
What is happening in the Denver housing market in March 2020?
- Our listings are up since February, but we have 8.2% fewer listings than we did a year ago.
- The record high listings for March was in 2006 with 27, 309 and the record low was 2015 with 4,112 we currently have 5,776.
- We closed 12% more homes than we did a year ago.
- The record average price of Detached homes is set! $513,526
- We had a record number of sellers withdraw their homes from the market. 761 total, 625 of them were in the last two weeks during the “stay at home” mandate.
- The stock market plummeted, and the interest rates were all over the place.
- Loan options are changing and will probably continue to have changes.
The number one question I am receiving right now:
Are the prices going to drop?
They could, but I wouldn’t count on it.
What happens next?
If you need to move, it’s ok! You can and it will be in some cases easier than ever, because you don’t have the competition, you also might not have a lot to look at, therefore making it a little easier to make a decision.
We watch the market so that you when you are ready to sell or buy, we go for it. People have things happen in life that make a move necessary and we are lucky to be able to help you be able to do that.
What is happening with Loans?
Loans – talk to your lender for more specifics, but at a high level this is what is happening
- Nontraditional loans are changing.
- Non-Qualifying loans are not happening.
- Jumbo Loans – these are varying from lender to lender, in some cases, they are being denied during the process of buying and there are some that are going forward. It will depend on the lender, the buyer. For example, if a buyer has the assets, but are not using those assets to purchase, but the assets are in the bank, the bank is more willing to lend to that buyer rather than the bank losing the assets to purchase the house.
- FHA – they are making changes to requirements and banks are not willing to take FHA loans if the credit score is too low and the rates will be higher as expected.
There are still many options to purchase a home. Jumbo buyers may even use a convention loan and a second to purchase instead of purchasing with a Jumbo. It’s the time to be creative and to be sure to use agents and lenders with experience to keep the transaction as smooth as possible.
People are asking about Forbearance. Be sure to know that Forbearance means you are required to pay it back, it doesn’t mean you are completely relieved from paying a few months. There are a few options, one option is that you have a 3-month forbearance, you will owe all three months in the 4th month. There may or may not be credit ramifications. If you know someone thinking of doing this, please have them triple check that this is really the right thing to do. I have experts if anyone needs to talk to them. If you don’t need it, do not do it.
There was definitely a lot happening in the Denver housing market in March. Do not let it overwhelm you. Let’s break down what you want and see how we can make it happen.
Thinking of making a move?
I can help.