Real estate has not only taken a position of favor because it’s now where we are spending most of our time, but it’s also giving homeowners stability in a shifting market. What keeps me up at night? The stock market. As CNN’s Fear & Greed Index moves further into Greed and Citigroup’s Panic/Euphoria Index points towards extreme Euphoria; both point to lower stock prices within a year. The recent news of COVID deaths breaking 155,000; COVID cases doubling in July; jobless numbers and continuing claims both breaking trend and increasing; and Yelp’s business tracker showing another 15,742 businesses closed permanently in July alone all point to a long recovery. Real estate, however, continues to show strength with a sneak peek into next month as pending home sales in July another big number of 7,122, 27.47 percent higher than last year.
Home is a safe place, one which should provide joy, safety, and stability. As the world around us is in a trying time; real estate continues to be the silver lining for those who can win the bid. Jobless claims and COVID cases are up and businesses are closed. Demographics and rates continue to push demand, while the uncertainty of jobs and schools weigh heavily on sellers. Builders are rushing to make up what existing homes are not and all of this could change if the stock market turns. Here’s what I see going on in the market.
Let’s start with the sellers. They aren’t moving. Inventory continues to strain the market with 6,449 active listings at month-end, 31.1% below last July. The uncertainty of the job market, the inability to find a replacement home, and the now the stress of homeschooling have sellers thinking twice. Meanwhile, builder confidence rallied in July to meet the suburban moving demand with smaller homes void of shared spaces. Denver saw New Home Pending Sales up 17.9% in June and 22.9% over last year.
Meanwhile, the buyers are clamoring for homes that are priced right and staged well, with 31% of detached homes selling for over asking and average days on market dropping 7.7% year over year and median dropping 36.4%. And not only is the demand hot for lower-priced homes as first-time homebuyers, downsizers, and investors push the close to list price for homes between $300,000 and $500,000 to 100.6%; homes over a million also gained favor in July. Are people finding well-being today in luxury homes? 55% more million dollar plus homes sold than last year driving the average closed price for single-family detached above $601,863. That’s almost 10 percent higher than July last year when it seemed the McMansion had all but lost favor. Speaking of McMansions, what were the two highest-priced homes sold in July? A $7-million-dollar home in Boulder and a $5.985-million-dollar home in Cherry Hills, of course.
The Rueth Team of Fairway Independent Mortgage Corporation
750 W Hampden Avenue, Suite 500
Englewood, CO 80110
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