The Colorado real estate market is fairly seasonal and spring is typically considered to be one of the best times to put a home on the market. As the state’s stay-at-home order went into effect late last week, it is interesting to look at the local real estate market’s initial response. Although experts agree the real estate industry is not in peril like it was in 2008, they expect that many markets will temporarily slow down while people continue to follow CDC guidelines and limit personal and business activities to essential purposes only.
The graph below shows the last 7 days of activity (March 24 through March 31). Compared to last year, new listings were DOWN only 11.6%, but the number of properties going under contract was DOWN 47%. The biggest change is with withdrawn properties which were up 205%. These are properties that were on the market, but the seller decided to either temporarily or permanently remove the listing for sale. Many of these properties could come back on the market once things settle down and start to return to normal.
By comparison the last 3 days of activity, just after the stay-at-home order went into effect, looks quite different. There is a significant decrease in the number of new listings - DOWN over 45% from this time last year. Properties under contract in the last 3 days are down only 20% compared to 47% in the last 7 days. Finally, the number of withdrawn properties continues to be significant, up just 54.5% compared to last year. As cases of COVID-19 increase in our area and news about the virus intensifies, sellers’ enthusiasm and confidence could be shaken.
For sellers who have kept their homes on the market, their behavior is increasingly cautious. These precautions include canceling open houses, restricting the number of showings and requiring buyers to remove their shoes and wash their hands or use hand sanitizer upon entrance.
The largest number of new listings is in the range of $300,000-$599,000, comprising over 51% of all new listings during this period. Quite a few new listings popped up in the $1.5 to $2 million range, but it's worth noting that 8 of those properties are not yet built and were sold pre-construction (before COVID-19 became a household word).
Within Boulder and Broomfield Counties, 36.7% of the total new listings are in Boulder while 24.2% are in Longmont.
The impact of COVID-19 on real estate showing activity in the state of Colorado is clear with a significant drop in showings, especially in the last 2 weeks. The drop in activity is indicative of the industry’s response to daily changes, increases in new cases and deaths reported, and the level of apprehension felt by buyers and sellers.
https://www.showingtime.com/impact-of-coronavirus/
COVID-19 WILL impact the real estate market, as it will impact every other industry, and the effects are obvious already – reduced new listing activity, fewer properties going under contract, and more properties being withdrawn as owners take a wait-and-see stance for now. There are buyers out looking for opportunities, bolstered by favorably low mortgage interest rates. Moving forward, the housing market will be far more influenced by COVID-19 than interest rates. Our spring selling season will not have the same level of activity and vitality as in recent years. It’s important to acknowledge that no pandemic lasts forever, and people will still need a place to live when this passes.
*All local data from IRES as of 4pm 3-30-20.