The year 2020 will be remembered for many things — some good, a lot not-so-much, and then some just plain fascinating. Put the Denver real estate market down in that last category, as it was a wild and unexpected ride out there.
When COVID-19 hit, no one knew what affect it would have on the housing market but now the stats are in and the picture is clear. Perhaps, courtesy of the virus and spending seemingly endless days staring at the four walls of our homes or apartments, many concluded now was the time to make a change. A little cabin fever, combined with interest rates that hovered between 2% asnd 3% drove record numbers of people into the market. That enthusiasm, however, ran up against Denver’s ever-tight housing market, creating happy sellers, frustrated buyers and unprecedented appreciation.
If you were already one of the fortunate to own a home in Denver, the benefits to selling did not necessarily outweigh the downsides like having to join the ranks of buyers yourself. The result was that we had a very typical number of homes placed on the market this year. What was untypical was the demand for those homes. A full 70% of those homes sold for over asking price and half of those sold in a matter of days with multiple offers. It was not uncommon to see homes all throughout Denver — not just in the traditionally “hot” neighborhoods — have more than a dozen offers, frequently pushing prices up between 5% and 10% over asking. Stunning. Imagine being a buyer making an offer on a $600,000 home, offering $50,000 over that and still losing out, and you get a taste of what buyers were up against.
Overall home prices jumped about 10% in value in 2020, but those numbers don’t tell the whole story. Take the traditional bungalows that dot most all of our neighborhoods and probably represent the most sought-after home type in Denver. The typical bungalow shot up in value over 20% — an amount I’ve never seen in my 20 years in this business. Homes over a million dollars, which often is a slower segment of the market, saw an increase in the number of sales of 20%. Neighborhoods that only a few years ago had never seen a million-dollar sale now were having dozens.
One segment of the market underperformed, however, and that was condo sales. It would seem the pandemic understandably made the idea of living in more dense surroundings less appealing. The market for condos was fairly flat compared to a year ago, with sales volume down 6% and, depending on the area, prices either fell — as much as 13% — or remained largely unchanged.
How you view all this of course depends on your perspective. Denver certainly has a growing shortage of affordable housing, and that is a problem. The passing of ballot measure 2B Department of Housing Stability certainly is a step in the right direction, but more will have to be done to address the growing imbalance in our housing market.
What will the new year hold? No one knows for certain, but likely a return to a more normal market is in store as COVID-19 hopefully fades into the history bin. Stay tuned.
Tom Snyder is the owner and managing broker of Snyder Realty. Statistics used for this article were derived from Recolorado data during the period of Jan. 1, 2020 to Dec. 20, 2020.
