Low-interest rates and an uptick in inventory point to a strong housing market for 2020.
If you’re looking to buy a home in the metro area, we've got some good news. The number of homes listed for sale on the market increased by 89 percent last month. According to the Denver Metro Association of Realtors, 4,853 homes were placed on the market in January—more than double the inventory on-hand in December. Winter is normally a slow time of the year for the real estate market, but warmer winter weather and historically low-interest rates have pushed more consumers into the market.
The challenge for Colorado, as well as the rest of the country, continues to be affordability and a shortage of inventory.
Nationally, the country is experiencing one of the largest home shortages ever recorded. After the crash in 2008, it took years for homebuilders to feel confident about building again. Even with the record numbers of homes built in the last few years, the United States is still short by 3.8 million homes. In Colorado, housing permits are down year-over-year as builders shift from large homes to smaller, more affordable homes. The median price for a new single-family home was $450,000 in 2019 compared to $400,000 for a resale. Builders are also adding more townhomes and condos to the market in order to aid affordability.
Even with higher prices, real estate continues to be a good bet for homeowners. The median price grew in more than 84 percent of zip codes in the Denver metro area. The zip code with the largest increase was the Downtown LoDo zip code of 80202 at 16.8 percent. The zip codes with the worst performance were Marston Slopes/Pinehurst (80235) and Winsor/Dayton Triangle (80247), suffering a decrease of 7.1 percent.
According to a study by Zillow, Denver is one of only three non-southern markets predicted to outperform in 2020.
So, what does all this mean if you are looking for a home? An increase in inventory means you’re less likely to write multiple offers before you get a contract accepted. The average days on market for listings is hovering around 40 days, but there are still some hot properties that sell in a day. The growth of more affordable new construction single-family homes could provide growth in the move-up market, boosting the number of entry homes available for first-time buyers.
What advice would an agent give to prospective homebuyers in this market? Look early, often and get pre-qualified with a lender so you can be prepared to write an offer.