During these unprecedented times, it is imperative to rely on good information, keeping us level-headed, objective, and focused on what helps us move forward. As many of us enter the third week of social distancing, some of us may be wondering just how this new life situation is affecting the real estate market.
So, what is COVID-19 going to do to the housing market’s spring selling season? According to Lawrence Yun, Chief Economist at the National Association of Realtors, we should look for the peak of the housing market’s annual cycle to be delayed, not canceled. Denver actually began the year slightly stronger than even the prior two years, only to find things noticeably slow up by mid-March. Inventory has remained low for the past 3-4 years, and is down about another 25% or so, depending on price range. But there is still reasonably good demand, which is providing a decent level of equilibrium, again depending on the price range. In the mid-lower price ranges, we still only have 1-2 months of available inventory, as things that are priced well, say below $600,000, are selling fairly fast, even receiving more than one offer. In the upper ranges, Denver has 2-4 months of inventory as those homes are not receiving the same kind of buyer activity. Of course, the excellent interest rates are helping mid to lower-priced homes become absorbed soon after they enter the market. Interest rates are important to the higher-priced buyer; however, the volatility of the stock market has more bearing, directly or even indirectly, on the more expensive markets.
The delicate relationship between supply and demand ultimately determines the pricing structure of the real estate market. Consumers will adjust to the “new normals” in many facets of their lives over the next period of months. As a good number of people will look to meet their changing wants and needs, LIV Sotheby’s International Realty will be here to help guide them through the changes and nuances while helping them in any way possible.