“What just happened?” That seems to be the question we ask every day of 2020. From politics and pandemics, to protests and shutdowns, 2020 is a year of turmoil, confusion, and unprecedented firsts across nearly all aspects of our lives. And just this month The Denver Business Journal reported that September was the “toughest market to buy a house in Denver metro’s history.” Who would have expected that?
This year the real estate market began with one of the strongest starts we have experienced in the past decade. After years of robust growth, a calming of the market was anticipated, but those projections were wrong and instead, the market was explosive. As quickly as the market rose in the first quarter, the pandemic shut it down in the second. We called it a “pause” at that time, because we still had handfuls of clients needing to move who were eagerly awaiting the market to reopen.
Halfway through the second quarter, as the real estate market reopened–despite all of the restrictions on our industry–the market seemed to pick up right where it left off. The pent-up demand from the “pause” combined with the current needs at the time resulted in a protracted market frenzy which has continued through today.
As of the end of September, housing values were up approximately 13% year over year. This is a direct result of higher buyer demand combined with the lowest housing inventory on record for the month of September. In fact, inventory was down nearly 46% from the previous September record.
Why? There are a few factors that have led to our current state. One being the pause in the second quarter. Because many moves are somewhat forced (jobs, divorce, death, growing families, empty nesters, etc.), they built up. So as the market paused, all of the housing needs were pushed, which caused months of pent up activity to overlap. Additionally, there are many homeowners out in the market right now who would like to move, but are concerned about their health and the risks of a move, so they are waiting, which leads to less houses on the market.
The rest of the year is simply up in the air. Historically, markets slow during the fourth quarter, as families settle down for the holidays and the cold weather moves in, especially during years with a presidential election. There is always a fear of the unknown, but it is hard to believe life can be more unpredictable than what we have already gone through in 2020. Only time will tell.
No matter what, we are here to be your advocate and resource when it comes to real estate. We have already helped nearly 200 clients successfully buy and sell this year. Rest assured, if you need us, you can count on The Steller Group to achieve your real estate goals.