Some of you may have seen the recent Westword article about a declining housing market in 2021. I thought it would be worth addressing as I'm sure this brings up concerns for current homeowners as well as those looking to buy.
This article is based on a study that CoreLogic released earlier this month and estimated Denver to lose 10% by Spring of 2021. It highlights data from May showing national appreciation up .7% month over month and 4.8% year over year… this is incredibly strong for May and especially a May inside a pandemic.
Based on the Westword article, and based on data from the only time Denver dropped by 10% - the relationship between supply and demand would have to be drastically different than it is now. As of now we have around 6,000 listings available in the 7 Metro Counties- to create a market in balance between buyers and sellers with a 6 month supply of inventory we would need nearly 50,000 listings on the market. When we saw our big decline in 2008 we had a 10 month supply of inventory going into it. We would have to create the same market conditions based on 2008 to see the same drop with the current demand in our market to create the 10 month supply we would need to have 80,000 active listings.
Couple of other helpful stats: Colorado has seen a net 2.6% population gain year to date… fueling buyer demand. Our unemployment is lower at 10.2% in May compared to the US at 13.3% (16.3% after adjustments). Our wage growth prior to COVID was #2 in the nation.
Based on of this information and the fact that the market is not slowing down at all, despite current yearly trends that it should by now, I feel confident that our market will remain strong overall, giving our buyers continued appreciation and a safe place to call home. Will that appreciation flatten? It could. But will they lose 10%? Outside of the move away from downtown condos… I can’t see that happening.
Thank you Megan Aller and Nicole Rueth for your input and help with the data!
Questions? Concerns? Please ask!