Nobody knows for sure what will happen, but once the economy opens, we believe we’re likely to see a surge in the real estate market that will last two to three weeks. Pent up demand for homes will drive buyers to look at homes and make offers.
These signs indicate we’ll see a short surge in transactions:
- The market has slowed enormously. If we look at a graph of showings in Colorado, we can see that around March 11, showings started to dive toward zero. The state has relaxed some restrictions, but most metro area counties are still under “stay at home” orders. Despite this, showings have increased in the past few days.
- Interest in new homes has been on the rise during the past few days, which also shows pent up demand.
- Interest rates are still very low, which makes buying a home now attractive.
- Sellers withdrew a record number of homes from the market. Once these homes are for sale again, buyers will have more to choose from, which makes buying more appealing.
- Finally, very simply, buyers who wanted to move last month couldn’t go see homes or couldn’t find a home they wanted because so many homes were withdrawn from the market, so stopped looking.
See pending sales during February, March and April 2020 and 2019 below. February was up compared to 2019. As “stay at home” orders went into effect in March, things slowed compared to 2019, but offers were still being made and accepted and the decrease in homes under contract was fairly small. This month, homes under contract dropped precipitously to 3,608 as of this morning, much lower than last year or February or March. This low number also indicates there’s pent up demand for homes.
Once all the counties in metro Denver move from “Stay at Home” to “Safer at Home,” we expect to see a short rush to buy and sell. If you’re thinking of selling, we believe you should get your home ready now, so when the economy opens throughout the metro area, you’ll be ready for showings and offers. After the surge, there’s no telling what will happen.
Questions? Give us a call.
Reach David and Tom at The Principal Team at 720-408-7409.