Buyers Close on Record Number of Homes and Condos in July
Ignoring both the pandemic and a dismal economy, buyers in metro Denver closed on a record number of homes in July, driving sales prices to record highs, according to the Denver Metro Association of Realtors.
Buyers closed on 6,664 residential properties, a 7.9 percent increase from June and a 12.5 percent gain from July 2019. That includes 4,086 single-family homes, up 12.8 percent on the year, and 1,858 condos and townhomes, up 11.5 percent. The number of sales last month was seven percent higher than the old record set in June 2017.
The average closing price for a single-family home hit a record $601,863, which is 7.8 percent higher than June’s average closing price and 9.9 percent higher than July 2019. The median closing price was $503,850, up five percent from June and 8.4 percent from July 2019. It also hit a new record.
Condo price gains were also strong, with the average rising 6.2 percent over the year to $383,174, and the median price up 6.7 percent to $332,893.
“Normally, during a recession, the housing market slows with the larger economy,” said Denver Post reporter Aldo Svaldi.“Colorado’s unemployment rate surged to 12.2 percent in April and remained elevated at 10.5 percent in June, the highest level of unemployment since the 1930s. Nearly half of Colorado households reported losing income because of the pandemic, according to the U.S. Census Bureau, making them less than ideal candidates to borrow.”
“Robust home price growth right now is all about the mismatch between supply and demand this summer,” says one industry analyst.“Both sellers and buyers stepped back from the market in a big way this spring, which caused sale volumes to crater and sale prices to soften. But since May, buyers have come back while sellers are still sitting on the sidelines.”
Record-low mortgage rates are improving affordability and motivating buyers everywhere, and there are some pandemic-specific things, such as millennials who chafed in tiny urban apartments during stay-at-home orders and decided it was finally time to pull the trigger on a bigger home. The mortgage rate in July for a 30-year traditional loan was as low as 2.99 percent versus 3.75 percent a year ago.
New listings in metro Denver are up, but not enough to keep up with demand. Sellers put 7,620 properties on the market in August, which was up 14.9 percent from last year. The month ended with 6,449 listings on the market, which is down 31.1 percent from a year earlier.