The real estate market in our corner of Colorado is still strong but responding proportionally given the stay at home orders and newly announced restrictions on real estate practices in the State of Colorado. Most experts predict that the majority of US real estate markets will see a drop in activity and transaction volume to around 50% of “normal”.
There is no precedent for our current COVID-19 scenario, but what we can do is look at global regions and markets that are farther along in the cycle of the virus than the US. Italy started dealing with the virus in January and by the end of March real estate market activity was down 70%. Similarly, in South Korea it was down 80%.
There are 2 key questions for Colorado…
1. CAN people logistically, legally purchase homes
2. WILL people buy homes, if they can?
#2 and market uncertainty is the big question. If in-person showings are determined to be non-essential real estate activities, then this will affect #1.
Last week (April 1 through April 8) the number of residential and attached homes sold in Boulder and Broomfield Counties dropped by just over 17%. This is a carryover of buyer activity in February and early March when real estate activities were not restricted. Other metrics show that our market activity has approached that 50% mark – new listings were down 48%, under contract and pending properties were also 48%. The number of properties withdrawn from the market is up over 92%, which is perhaps an indication that some sellers are willing to wait out the pandemic-related home marketing challenges.
Of the new properties listed in the last week, almost 49% of those in Boulder and Broomfield Counties were in the $300,000- $599,999 range. Over 31% listed were in Longmont, over 34% in Boulder, 7% in Broomfield, and the remainder in other parts of Boulder County.
Another metric to look at is the Sell-Through Rate- the ratio of under contract and pending properties to the number of new listings, irrespective of the volume of activity taking place. This indicates how fast our "product" is flying off the shelves. A bigger % indicates a strong sellers' market, while a lower % indicates more of a buyers' market. The sell-through rate last week of over 79% is comparable to that of the last several years, indicating we are still in a market favorable to sellers.
Looking at the last 3 weeks since the stay at home orders were put in place, all of the relevant metrics are trending down but not drastically so. The Colorado economy and our local real estate market were strong before COVID-19 and will be strong again.