July brought hot weather and a hot real estate market for the Denver metro. Last month 6,664 homes sold in the 11-county Denver Metro, according to the Denver Metro Association of Realtors (DMAR) Market Trends Report released this week. This is nearly eight percent more than the 6,179 homes sold in June, and well above the 4,762 homes sold in March pre-COVID-19.
The increasing number of homes sold last month was to be expected, as June saw the highest number of pending contracts and Gov. Jared Polis allowed open houses to begin again July 1. What many realtors didn’t expect to see was a $43,000 increase in the average price of a single-family home. In July, the average single-family home sold for $601,863—a record-breaking sticker price for the metro, according to the report. (The average price of a single-family home in June sold for $558,935.)
“I did not predict that we would have such an increase in price in one month. That was a shock to me,” says Jill Schafer, chair of DMAR’s Market Trends Committee. “I knew prices were going up, but I don’t know that I predicted they would go up that quickly in one month.”
The increase in price is primarily caused by low inventory. While the number of homes sold increased by eight percent month over month, the number of active listings in the metro only increased one percent and is still down 31 percent year over year. The little inventory on the market and demand to buy a home causes a seller’s market where multiple offers come in for one home.
Schafer, who believes prices will continue to go up, says people who didn’t lose their job were able to save money and are now spending it on a home. “It just seems to me there’s a lot of people who took that money they couldn’t spend and put it towards a down payment, or upgrading their home to have larger homes,” she says.
The luxury market is seeing a tale of two stories. Single-family homes priced over $1 million are facing a seller’s market with 364 homes selling last month, up 47 percent from June and 61 percent from July 2019. Single-family homes in the luxury market also had 422 new listings and 399 pending sales (up 105 percent from July 2019), according to the report. Luxury condos and townhomes, on the other hand, are seeing a buyer’s market with almost seven months of inventory available. Supply is starting to outpace the demand for attached luxury homes with new listings increasing 106 percent year over year while pending sales only increased 67 percent.
“The difference between the single-family homes and condos in the luxury market certainly makes sense considering the current situation,” Andrew Abrams, member of DMAR’s Market Trends Committee, said in the report. “While being more isolated and having less activities to do, people generally want more space. … Until we have a solution for COVID-19, I can see these trends continuing.”