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Denver Real Estate Forecast & Market Update – June 2020

Denver real estate forecast & market update graph for June 2020

Denver Real Estate Market Stats Reflect April's Lows and Show May's rebound

Neither pandemics nor civil unrest can hold the Denver real estate market down for long. This months numbers show a mixed bag as April’s low totals are reflected in May’s closings; however, buyers and sellers came back in droves raising the number of pending sales to record highs.  In this post, I break down the numbers, summarize the current market and give you my prediction on the Denver real estate forecast & market health.

The best way to read this post: The majority of this post is comprised of me analyzing different metrics to break down what is happening with price, supply and demand across different segments of the Metro Denver real estate market. This helps me determine where the real estate market has been, where it is now and forecast where it is likely to be in the near future. If you are a stats nerd like me, you might enjoy reading the entire post, if not - skip to the summary at the end of each section, or all the way down to the overall Denver real estate market review and Denver real estate forecast at the end of the post. If you are reading this post on a cell phone, turn your device sideways to see the graphs in their entirety.

Metro Denver Real Estate Statistics Snapshot

Latest Month
May 2020
Previous Month
April 2020
Year Over Year
May 2019
Median Sold Price429,900$430,000421,000
# of Active Listings9,9469,64211,740
# Under Contract9,3434,6158,824
# Sold Homes4,2694,7987,484
Months Supply of Homes1.71.72
Average Days on Market272525

Metro Denver Real EState Prices

Median Closed Price For The Entire Denver MLS

The median sold price of homes closed (single family and attached) stayed virtually the same from April to May. Market prices are up only 2.1% year over year from last April.

Median Closed Price By Square Feet - Single Family

Here, I divided the single family detached (houses) segment into four fairly equal subsegments based on the number of houses sold, by square feet. (Approximately the same number of homes with sq ft between 1,841 – 2,530, sold as the number of homes with 3,401 or more sq ft). I use the metric – price per square foot, so that the numbers are less skewed. While the Denver market as a whole dropped 1%, larger houses over 3,400 sq ft dropped in price by 2.6% per square foot and the smallest houses (under 1840 sq ft.) dropped by 1.9%

Median Closed Price By Square Feet - Attached

For townhomes, condos and duplexes, I divided the segment into two fairly equal subsegments based on the number of homes sold, by square feet. I limited it two because only 1,038 attached homes sold throughout the Denver metro area in May. Larger attached home prices dropped by 2.4% (per sq ft.) while smaller attached home prices went up by 3.1%

Pricing Summary

Prices came out of the worst economic month of the pandemic fairly unscathed. Homes closed in May went under contract in April and late March while open houses were shut down and showings were either shut down or severely restricted. Prices dropped slightly or stayed even – larger homes were negatively impacted the most, dropping by about 2.5%. Over the past 5 years, the average difference in price from April to May for single family houses, attached homes and all homes combined was an increase of 1.5%, 1.9%, and 2.5% respectively.  

Metro Denver Real Estate Supply

New Listings - Single Family Detached

The average number of new single family detached homes listed in the Denver area in May over the past five years was 6,928.  May of 2020, the Denver metro MLS got 6,747 new houses listed for a decrease of only 181 or 2.6% from our April average.

New Listings - Single Family Attached

Townhomes, condos and duplexes had 2,362 newly listed properties in May.  This number is above the 5 year, May average of 2,320 by 42 units or 1.8%.

Homes For Sale - Metro Denver, All Subtypes

As of the end of May 2020, the metro Denver MLS reported 9,946 homes were for sale.  The average number of homes for sale over the past 5 years was 8,359 in May . The number of homes for sale in May has risen each year since 2016 and the metro Denver inventory is down 15.3% year over year from last May, so, even though we are above the 5 year average, if we estimated the sans covid projected increase, the Denver housing inventory was down by about 20% at the end of May.

Supply Summary

While the number of new listing in May is not as high as we probably would have seen without a pandemic, sellers are bringing lots of new inventory to the Denver real estate market. Masks, booties, sanitizer, wipes and virtual tours are making it safer for buyers to look at homes, partially alleviating spread of Covid-19 fears among Denver home sellers.

Metro Denver Home Buyer Demand

Sold Homes - Metro Denver, All Subtypes

On average, over the past 5 years, 6,798 homes sold throughout the Denver area in May. This year, the Denver MLS reported 4,269 sales for a decrease of 37% compared to the 5 year average. This number is no surprise as it correlates with the under contract or pending sales reported as down 39% last month.

Pending Sales - Metro Denver, All Subtypes

The pending homes sales metric is the best indicator of our current market because it is our most recent metric and tells us how many homes went under contract during the month of May, while closed sales and closed price in May show the results of homes that went under contract months ago in April and late March.
Buyers came back in a big way and reheated our covid cooled market. In fact, so many buyers came back, that May 2020 broke the record for the number of pending sales during any month ever with 9,343 homes going under contract throughout the Denver area.

9,343 homes went under contract in May which more than doubled last months pending sales and is a 17% increase from our five year May average of 7,955. 

Demand Summary

Demand was up in May by 17% year over year, as buyer stormed back out to look at homes.

Interest Rates

According to Bankrate.com’s Rate Trade Index, “In the week ahead (June 4-10), 42 percent of the experts forecast that rates will rise, 16 percent of the experts predict a drop in rates and 42 percent predict that rates will remain relatively unchanged (plus or minus 2 basis points).”

Today’s Most Prevalent National Rates as reported by Bankrate.com.

  • 30 YEAR FIXED – down to 3.49% compared to 3.54% last month
  • VA – 3.79%
  • FHA – 3.34%
  • 15 YEAR FIXED – down to 2.82 compared to 3.13% last month
  • 5 YEAR ARMS – down to 3.18 from 3.31% last month

Denver real estate Forecast and market review

Pricing – Larger homes felt a bit of a negative impact, but overall, prices stayed fairly even for metro Denver homes that closed in May. Although prices were mostly unchanged this represents a bit of a drop because typically this time of year we would expect to see prices rising. In general, May pricing was down about 2% from where we would expect to be sans Covid-19.

Supply – Lifted stay at home orders and safer showing practices calmed the nerves of many sellers bringing new listings in May back up near where we would expect them. Because buyers were out in record numbers, our inventory remains low and the Denver real estate market is a strong sellers market as we head into the summer months.

Demand – I thought buyers would be back, but I was a little surprised by the record breaking number of pending home sales. With 9,343 pending sales, May 2020 had more homes go under contract in the Denver area than any previous month – ever. 

What’s Next For The Denver Real Estate Market? – My Denver Real Estate Market Forecast: – With record breaking pending sales in May, we can expect a high number of closing in June and July. Barring a setback from COVID-19, I expect a steady stream of buyers and sellers to continue to come back to the market as things start getting more towards normal. I predict that we will have a stronger than usual summer selling season as our typical spring buyers and sellers stretch into July and August before school starts again. Prices will start to rise slightly for a few months, but an increase in the number of new listings will keep them from rising as quickly as they typically do in the spring. I expect our highest prices to come for closing in July or August this year (under contract in June and July), before they start their seasonal dip.

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About the Author

Nathan Hart, CRS, ABR, PSA, RENE
Nathan Hart, CRS, ABR, PSA, RENE

I have been a REALTOR in the Denver area for 25 years. Through continuing education and extensive real-world experience, I have become an expert in the real estate field. Blog posts give me an opportunity to share my knowledge and insights.

If you know of anyone who is thinking about buying or selling a home, please share their name with me or my name with them.

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