Real Estate News
The past ten days, life in Colorado has been changing daily. At first, we were encouraged to continue about our business so long as we took precautions to wear gloves and wash hands. Then the Mayor of Denver announced a Stay-at-Home directive, however, this requirement but it did not include Real Estate professionals. We could still cautiously go about our business.
A day later the Governor ordered a mandatory stay-at-home directive. Originally real estate was not included as an “essential business”, but that directive was amended a day later on March 25th to allow “essential” or “critical” real estate activities. For example, they don’t want people to be homeless because they can’t close on their new home purchase. If you must make a move now it is possible. However, with that being said, unless buyers and sellers need to transact now, it is better for your health and the health of your family to wait it out until mid-April or further notice from our local officials.
How will this abrupt stop in real estate affect the market?
Time will tell. We have not been through this type of shutdown before, so we don’t have a point of reference for comparison. What we do have are the statistics from the first three weeks of March compared to the same three weeks last month. (Please see the stats below in the next section).
There are a few differing opinions on how this abrupt halt in activities will affect the real estate market. Some say that it will be like we have just pushed the “pause” button. When the restrictions are lifted, we will pick right back up where we left off, in the ramp-up phase of a Spring market.
There are others that say the state of the economy will take longer to recover. Consumer confidence will be low, people will be getting back to jobs slowly, and it will take time for people to build back up their savings to purchase a home.
Personally, I think it will be a combination of both. From my clients that were planning on listing this Spring, they still want to list their homes. Now they simply must wait. None of them have said they don’t want to list at all, rather than it will just be delayed.
I think there will be some buyers who are not able to purchase for a while, but there are others who have been fortunate to continue with their employment during this time. They will be ready to purchase when we can get out there for showings.
I imagine that the low level of inventory will keep prices relatively strong. I had a buyer over this past weekend who offered on a property. There were multiple offers. We didn’t win because we only overbid by $5,000 and there was someone who overbid by $30,000! This type of scenario does not happen in a declining market unless the property is significantly underpriced. This aforementioned property was NOT underpriced.
Overall, prices may stay level but due to this low level of inventory and strong demand. I don’t expect prices to drop off a cliff as they did in the last recession. Prices dropped drastically due to a high inventory of more than 30,000 homes on the market at once. In comparison, we only have around 5,000 homes in the market now.
That is my best guess at the market over the next few months. But honestly, in these unprecedented times, no one knows, not the government or the best economists. Only time will tell. We shall see what unfolds over the next several weeks and months that lie ahead.
Stay safe. I hope you can find ways to enjoy this extra time at home. If you want to chat about Real Estate feel free to give me a call! I’m around.