March 9, 2021
The Denver metro housing market is BOOMING after 2020’s pent-up buyer demand –thanks to a worldwide pandemic, social and political events and a changing work-from-home economy. Great for sellers, not so great for buyers who were hoping to own a sliver of real estate sometime soon.
According to the Denver Business Journal, February ended with reports of a record-low inventory for the residential resale market in the Denver metro area. A resurgence in home-buying activity that began last summer has continued to drive prices up to 20 percent higher than eight or nine months — fueling stiff competition among potential buyers.
In the monthly report from the Denver Metro Association of Realtors, Andrew Abrams, Chair of the Market Trends Committee says the underlying theme of the market today is speed. The italics are ours, and we would add an exclamation point!
Homes are going under contract in five days (the median) or less – some in 24-72 hours. The average price for a single-family home was $530,000 last month; and for an attached home, the median price was $337,250. Some resale listings are seeing more than 100 showings in a weekend and getting up to 20 offers.
Says Abrams, “There are two frequently asked questions: is this sustainable and are we in a bubble?”
No Crystal Ball, Only Market Indicators
Since neither Mr. Abrams nor the other forecasters have a crystal ball – most agree that as the population gets vaccinated, more homes may be listed by owners. However, if interest rates increase, that may decrease buyer demand and change the current multi-offer scenarios. But notice the double qualifiers: may and may.
Greg McBride, CFA, Bankrate’s chief financial analyst expects mortgage rates to end 2021 at 3.1 percent — still very low — but he says there could be some dramatic swings throughout the year.
“It will be an especially volatile year for mortgage rates, with fixed rates falling to even lower lows early in 2021 on economic concerns but rebounding in the back half of the year as widespread vaccinations lead to a surprisingly strong surge of economic activity and the inflation worries that come with it,” he says.
His rate forecast is in line with the general consensus among housing economists. The National Association of Realtors also expects mortgage rates to average 3.1 percent in 2021, up from 3 percent in 2020. And the Mortgage Bankers Association says rates will average 3.3 percent in 2021.
The New Construction Option
While there is a nine-to-12-month wait involved for new home construction, new builds offer lots of options available to buyers who aren’t in a hurry to move. In the master-planned community of Southshore, home buyers can choose from four builders and more than two dozen floor plans and prices. The amenities are among the best in Aurora, and the walking distance to the Aurora Reservoir is under 10 minutes for many homes which makes the community’s theme of “Life at the Lake” a reality lots of residents.
For home buyers with school-age children, being part of the Cherry Creek School District – one of the top-performing in the state — makes living in Southshore desirable for another reason. Quality education adds to the appeal of living in one of the Southshore neighborhoods – which are connected by biking and walking trails, and close to major thoroughfares and all of life’s essentials.
Abrams may have said it best, when considering buying a home in the current housing market, “creativity and perseverance will help buyers succeed in this tough market.”
Come Home to Southshore
With two rec centers (as of spring of 2021) and some of the most beautiful homes in Aurora, the master-planned community of Southshore should be on every home buyer’s radar. If you don’t live here yet, isn’t it time to explore the options in brand new homes from Taylor Morrison, Century Communities, Richmond American Homes or Toll Brothers? Life at the Lake looks like this – stunning ranch and two-story designs – priced between the $400s and the $700s, close to shopping and recreation.