Denver’s Housing Market is Weathering the Storm
We’re well into Colorado’s “spring-time rush” months, which is typically the busiest time of the year for the state’s real estate industry. As the weather warms each year, buyers become more active and home sellers begin listing their homes to meet the demand. Once the weather cools, estate listings drop in the MLS as fewer people house hunt in cooler weather. 2020 has been anything but normal.
Enter COVID-19. April’s Denver Metro Association of REALTORSⓇ data showed home sellers pulling their listings from the market despite a large number of closings. Uncertainty swirled as small and large businesses alike temporarily closed, spurring huge numbers of furloughs and setting record-high unemployment rates. Public officials had little to no guidance or answers to how long social isolation would last, and those who invested in the stock market saw one of the largest market drops in history, as the federal government’s injecting one of the largest fiscal “stimulus” bills in history to alleviate effects on the economy.
COVID-19 certainly took the brunt of the blame, but energy markets were primed for major sell-offs as Russia and Saudi Arabia abandoned a crude production agreement amid increasing tensions. As Russia, Saudi Arabia, the U.S., and other major crude exporters continued to oversaturate the supply-side of the market, COVID-19 prevented demand from stabilizing the energy market as social isolation measures kept people from driving and airlines saw a huge reduction in flights.
On top of the energy markets going haywire, it’s no secret most economists expected a gradual slowdown of GDP growth – aka a “recession.” As we’re all aware, recessions are normal market behavior and shouldn’t cause panic. Most recessions are natural adjustments, realignments between demand and supply, and economists expected the U.S. economy to experience a very mild and gradual slowdown sooner than later. Instead, COVID-19 appeared and *waves hand* all this happened.
Despite the negative bombardment of COVID-19, the financial markets, the economy, the election… the world continues to spin. We’re still here. Denver’s job market is showing that it’s resilient to recessions and pandemic, and that’s something to celebrate. Demand will continue to drive the housing market. Even with COVID, people are growing their families, retiring and downsizing, or are looking to upgrade
Let’s return to the Denver housing market. The facts: we know demand is pent-up as closings are still happening, mortgage rates remain at historically low levels, and inventory is still tight. We’re seeing fewer houses on the market due to timid home sellers, but the ones who are selling today are being offered high prices.
What about the future? Well, who really knows, right? COVID may stick around – or not! The important thing to know is Denver’s housing market is right where it needs to be. Heck, I’m going out on a limb here, but I’d imagine many people (especially renters) are sick of their homes and may want to find something new after everyone’s been stuck there for well over a month. Housing continues to be a safe bet, much more so than the retirement portfolio in the stock market.
Of course, there’s no rush. If you need more time to make decisions or you’d like to see more stability, no one will blame you for not wanting to buy or sell anything today. However, if you see the opportunity in today’s market as I do, call me. Let’s chat. There’s a reason why The Rueth Team has become the No. 1 mortgage lender in Denver, Colorado. We’ll take a look at your situation and give you advice on how to best enter the real estate market for YOU.