Denver Real Estate Market Report for May 2021

Some key market indicators to watch:

• New construction: Housing starts totaled 1.4 million last year, and some anticipate that we will see 1.5 million in 2021. Some builders are seeing waiting lists one to two years long (Builder).
• Construction costs continue to rise: Lumber prices have skyrocketed more than 300% since April 2020 (National Association of Home Builders).
• Employment numbers stalling for now: The U.S. Bureau of Labor numbers for last month show only 266,000 new nonfarm payroll employees added in April, down from 770,000 in March and 536,000 in February (Builder).
• The economy and inflation: Based on the Consumer Price Index, core inflation has risen 3 percent year-over-year and 0.9% month over month (Builder).
• Pandemic-related moratoriums on foreclosures and evictions are set to expire June 30: Some lenders plan to start resuming foreclosures in July. Around 2.1 million homeowners are still in mortgage forbearance (Mortgage Bankers Association). As of April, about 1.8 million households who aren’t in forbearance were 90 days delinquent on their loan (Black Knight).
• Changes in mortgage rates: Predictions vary from source to source on what rates are going to do. Experts expect us to be somewhere near 3.5 by the end of 2021 and close to 4 percent by the end of 2022. “Rising rates are expected to have a large impact on the future of housing prices, as well as the ability for potential buyers to afford a home,” (Builder).

May’s Numbers Over the Years:

	Avg. Days on Market	Avg. Sold Price: Single Family Home	Avg. Sold Price: Condo	# of New Listings	# of Homes Sold	# of Homes Pending	Avg. Sold Price Change YOY
May 2016	30	$456,018	$300,348	6,788	4,861	5,857	+ 9.60%
May 2017	29	$490,700	$317,082	7,224	5,320	5,808	+9.83 %
May 2018	18	$540,624	$356,337	7,748	5,235	6,178	+ 11.37 %
May 2019	24	$555,482	$380,363	8,789	5,551	6,470	+ 3.36 %
May 2020	23	$543,072	$368,241	7,312	3,152	6,809	– 1.31 %
May 2021	11	$700,559	$449,317	6,311	5,322	6,719	+ 26.13  %

Source: DMAR

Average Interest Rates by Year in Denver

Data courtesy of Megan Aller | First American Title

During these unprecedented times, Usaj Realty would love to carefully assist you with finding your next place to call home, or selling your current property. Our acumen, attention to the market, and negotiation skills will all go to work in order to advocate for your goals. Email us at info@usajrealtystg.wpenginepowered.com or call 720.398.2999. We measure our success by the happiness of our clients!

Headlines: What’s Happening in Colorado

The End Of The Pandemic Is In Sight. What Does That Mean For Colorado’s Housing Crisis?

“Coloradans typically make about $10,000 more than the rest of the nation per household, but homes are on average less affordable. The price of a home is about five times higher than household incomes in Colorado, whereas around the country, it’s closer to four times higher, said Michael Neal, a senior research associate in the Housing Finance Policy Center at the Urban Institute.”

– Colorado Public Radio

Denver’s real estate market breaks 16 records in April 2021

“The Denver Metro Association of Realtors market trends report shows 16 sales related records were broken last month. One of the records is the average price of homes being sold.

In April, single family homes sold for an average of $623,825. The previous record was in March 2021 of $587,484.”

– Fox 31

Lumber Price Surge Drives Up Colorado Construction Costs

“A nationwide surge in lumber costs is affecting home buyers and homeowners in Colorado. Ali Wolf with the housing market research firm Zonda says lumber prices are up 250% compared to a year ago, driving up construction costs.”

– CBS Denver

What homebuyers are up against in the Denver market despite inventory boost

“And for the first time, the median price of a Colorado detached home hit over $500,000 in April, according to the latest figures from CAR. In Denver County, single-family homes hit a median price of $565,000, according to April figures from CAR.”

– Denver Business Journal

Headlines: What’s Happening Nationally

Mortgage Rates Move Up, Now Average 3%

“As the economy continues to strengthen, mortgage rates are heading upwards. The 30-year fixed-rate mortgage increased from its 2.94% average last week to 3% this week, Freddie Mac reports.

Mortgage rates are more likely to continue to rise than fall throughout the rest of 2021,” Nadia Evangelou, National Association of REALTORS® senior economist and director of forecasting, writes on the association’s Economists’ Outlook blog. “The economy is growing faster than expected as Americans get vaccinated against COVID-19 and resume traveling, going to restaurants, bars, events, and shows.”

– Realtor Magazine

COVID-19 Update: “Three Yellow Flag”

Zonda chief economist Ali Wolf and senior managing principal Tim Sullivan “have pinpointed three ‘yellow flags,’ or early warning signs of difficulty in the market. First, the housing market is showing some indications of stabilizing, with some anecdotal reports of buyer traffic falling back. Second, as home prices continue to rise and demand remains strong, the “invisible ceiling” beyond which prices put pressure on demand is an entirely unknown point—one that may not be known until it is hit. And third, falling sales at the upper end may portend a pullback in total sales, driven by rising prices and interest rates across all product types.”

– Builder

‘Zombie Foreclosures’ Creep Up in Second Quarter

“About 1.4 million residential properties in the U.S. were vacant in the second quarter—1.4% of all homes—a new report from ATTOM Data Solutions shows. That represents a nearly 28% increase compared to the first quarter, revealing a potential trend of more vacant, distressed properties hitting the market.”

– Realtor Magazine

Report for May 2021:

Read Denver Metro Association of Realtor’s full report on last month’s Real Estate trends and statistics in Denver here.