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More than 13 percent of all active listings—760 homes total—were withdrawn from metro Denver’s housing market in March amidst the escalating coronavirus pandemic, according to the the latest Market Trends Report from the Denver Metro Association of Realtors. This number appears to be unprecedented.
For historical perspective, March 2003 saw only 1.99 percent of active listings withdrawn, says Jill Schafer, chair of the DMAR Market Trends Committee. In January 2020, just 284 homes were taken off the market.
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There are a number of reasons a seller might withdraw their property from the market after listing, Schafer says—and they certainly don’t all include a global pandemic. Other reasons include issues with the roof or other urgent repairs that need to be fixed, not having much luck with buyers, or changes to the owner’s employment status. Schafer says most withdrawals occur at the end of the year when people are preparing for the holidays.
But for March, the reason for the increase in the number of listings getting pulled can be reasonably assumed. “My guess is this past month there were a lot of people who don’t want strangers who may potentially be infected in their home. Or, they may be infected and they don’t want to pass it on.” Schafer says, adding that working from home makes showings more inconvenient.
So, what happens when a housing market sees almost 14 percent of its inventory dwindle?
“We could see a resurgence of people who took their homes off or are waiting to put them on until this is all over,” Schafer says. “We could also see a number of people who have had economic changes and now don’t feel they can afford their homes so they will sell and either look for something less expensive or rent.” Additionally, investors who have loans on rental properties and tenants who could not pay during the crisis might sell their properties to get out from under the debt.
However, the report’s data shows that Denver is still a strong seller’s market. In March, 30.24 percent more new listings came online. This pushed active listings up 19.46 percent (that’s still 8.2 percent lower than March 2019). Additionally, 12.02 percent more homes sold month over month, pending contracts increased 8.03 percent, and homes took an average of 29 days to sell versus 38 days in February’s report.
While the current state of affairs could certainly cause anxiety or fear in home buyers or sellers, Schafer offered some advice: For those merely hoping—not needing—to buy or sell, she recommends waiting until “we find out how long this lasts and until it is safe to be out touring properties.”
For those who absolutely need to buy or sell, she points out that the market is still moving. Here are some tips that buyers (and sellers) should consider:
- Make sure you qualify with your current financial situation and with any new changes in loans programs.
- Make three lists: One for things you must have in your new home. One for things you’d like to have, and one for deal breakers. When you are looking through homes online, narrow it down to the houses that could be “the one” before setting a showing. It’s not the time to be out casually looking.
- Make use of 3-D tours, videos, floor plans, and other technologies to see the home prior to setting an in-person appointment.
- Have your agent do research on the HOA and provide you those documents prior to even seeing the property. If the HOA is not financially solid, or there are rules you don’t want to live with, keep looking.
- When visiting homes, make sure to follow CDC guidelines, including wearing masks, gloves, and booties, and washing your hands or using hand sanitizer between each property. Stay at least 6 feet away from everyone, even your agent.
- Ride separately from your agent and meet at the property. Don’t ride in elevators together, and ask your agent or the seller to open all doors and turn on all lights before you arrive to limit the number of surfaces you’re touching.
- Don’t bring friends or family along. The people who will be on title as the owners are the only ones who should be accompany you. And if possible, leave the kids at home.
- If you are symptomatic or are known to have been exposed to COVID-19, ask the listing agent to do a FaceTime tour or put off your house hunt until it’s safe to resume. No home is worth risking your health or the health of others.
Schafer says that the real estate industry has generally used digital tools like 3D tours and videos for both showing homes and marketing them, especially for higher-end homes, which take longer to sell. Now, it’s more or less a necessity to invest in these options. “When a house was selling in two days with multiple offers, it wasn’t worth the time or money to have some of those things done,” she says. “Now it may be the only way for some people to see the property.”
Schafer says that this reliance on technology may not last. In fact, an entire generation of local agents haven’t needed to do much marketing for homes in the past because Denver’s housing market has been so strong. But as we continue to navigate these unusual times, one thing is for certain: We should all expect the unexpected.