With stay-at-home orders gradually lifting throughout parts of the country, data indicates homebuyers will jump back into most markets, and that is certainly true in the Boulder/Denver area. After many families put their plans on hold due to the COVID-19 pandemic, what we once called the busy spring real estate season is shifting into the summer. In 2020, summer is the new spring for real estate.
Additionally, according to Google Trends, which scores search terms online, searches for “real estate” increased from 68 points the week of March 15th to 92 points last week. This is a clear indication that more potential homebuyers are looking for homes virtually. Fortunately, our WK associates have many virtual resources to enhance the online viewing experience for our listings.
The week ending May 27th saw HUGE new listing activity in Boulder and Broomfield counties, up 68.5% compared to the same week in 2019, up almost 35% from 2018 and just over 46% from 2017. Under contract activity was up almost 12% compared to 2019, and also up almost 12% from the prior week. Pent up demand continues to catch up in a big way now that sellers have a little more confidence that stay-at-home orders are in the rearview mirror.
Closed transactions may still need a couple more weeks to catch up and although we’ve seen that statistic rise for 3 weeks now it is down 38.5% compared to last year. Showings resumed the weekend of May 9th and as such, given that a typical real estate transaction in our area takes 30 days to close, we probably won’t see closed transaction numbers rebound until the second week of June. The number of homes put under contract has risen steadily each week since showing restrictions were lifted and this will soon translate to closed transactions.
Despite the reputation that the Boulder area has for high home prices, there are still homes within reach for first-time buyers with almost 38% of all new listings this week in Boulder and Broomfield Counties in the $300,000- $599,999 range. This is however the lowest share of “affordable” new listings to hit the market in the last 9 weeks. Some of the outlying suburbs and close-in mountain areas had new listings in the single digits this week. The pandemic has prompted people to consider the merits of living away from crowded city centers, so perhaps current residents of areas like Superior, Niwot, Erie, Lyons and Nederland are inclined to stay put!
We’ve explained this the last couple of weeks, but the sell-through rate is an indicator of the pace of market activity, indicating how fast new listing inventory is absorbed in a specific period of time. A high or increasing sell-through rate means that most of the new inventory was put under contract during that period. A low or declining sell-through-rate means there’s decreased demand for the new listings, or could be due to seasonal fluctuations. With the current sell-through rate of 81.3% sellers can be confident that their time on market likely won’t be excessive.
Current market conditions indicate there are great opportunities for both buyers and sellers. One reason buyers are coming back to the market, even with forced unemployment and stay-at-home orders, is the huge incentive of historically low mortgage rates. Sam Khater, Chief Economist at Freddie Mac said:
For the fourth consecutive week, the 30-year fixed-rate mortgage has been below 3.30 percent, giving potential buyers a good reason to continue shopping even amid the pandemic. As states reopen, we're seeing purchase demand improve remarkably fast, now essentially flat relative to a year ago.
Finding a home to buy, however, is still a challenge, as we saw that sellers withdrew many listings from the market this spring. Though more people are listing their homes this month compared to last month, current inventory still does not seem like enough to meet the demand. If you're thinking of selling your house this summer, now may be your best opportunity for your home to stand out from the crowd. Buyers are looking, and with the expertise and experience of our seasoned agents, and the extensive virtual, digital and traditional marketing tools WK Real Estate offers, your house could be at the top of their list.