(Note: Predictions provided by Corken + Company, courtesy of 5280 Magazine)
After a long few weeks spent quarantining, it seems we have flattened the curve enough to return to some of our normal routines. Restaurants and small businesses have re-opened their doors and generally June has brought a subtle but very welcome sigh of relief. And yet despite this calm, there is still some lingering uncertainty especially when it comes to real estate. The nature of the industry makes it susceptible to possible delayed ramifications. Our friends at 5280 have compiled research and predictions from local experts to unpack some of this uncertainty. Ultimately it seems that apart from some minor changes, everything is generally going to be okay. Follow along as we summarize their compelling and reassuring findings.
There will be a slowdown in the market especially in the late summer and early fall months due to a higher than average influx of new listings. While multiple offers will continue in prevalence (especially for certain “hot” properties), buyers will have a little more time to consider their options when shopping. Slightly more properties will come on the market and slightly less buyers will be shopping resulting in a small but still noticeable slow in the market.
Mortgage rates will stay low. This will encourage buyers to start shopping more readily than they would otherwise. A healthy demand will help stabilize the market.
An interesting competition will arise among millennials and baby boomers. Adults approaching 30 and considering buying a home may be looking at the same homes as their parents who are approaching retirement and looking to downsize. Both want walkability, less maintenance, and luxury finishes. Some particular property types such as city condos and urban bungalows may attract even more competition than usual.
Developers will continue to adjust and respond to local city ordinances. The most recent being the banning of “slot homes” (boxy multifamily condos perpendicular to the street typically with little outdoor and green space) in certain areas of the city. These homes have typically offered an urban location at a more affordable price point. Laws regarding this development will likely dictate where certain buyers are able to shop according to their budget.
Denver is no stranger to “it” neighborhoods. Because of our robust real estate market the label seems to shift frequently. What was once up and coming can top out in less than a year. Neighborhoods like Berkeley, Baker, and Sloan’s Lake are almost equal in price point to Highland and Wash Park. But there are still neighborhoods where taking a calculated risk, especially at the right time, may be a great idea. These neighborhoods include Athmar Park, West Colfax, and Sun Valley.
While the 5280 article provides a sort of calendar year glance at the market which is worth reviewing more in depth, the general gist is that seasonal market trends will likely persist despite the social and economic effects of the pandemic. Spring experienced a lot of activity although slightly delayed and mid/late summer will bring a bit of a lull which is normal and occurs every year due to buyer fatigue and other life events including summer vacations and back to school.
There will be a surge of additional dwelling units being constructed. The prospect of ADU’s has always been mostly favorable: more space and a possible source of revenue. Now more than ever, the advantages are being considered as families look to house more people in one place that can contribute to the mortgage, parents want to give their college graduates a place to stay that isn’t technically mom and dad’s while they job hunt, and air bnb’s become more popular and more lucrative.
First time home buyers will increasingly shop beyond Denver city limits. With home prices continuing to rise and the average income failing to meet its pace, they will be forced to consider surrounding urban suburbs in their search.
Shopping and marketing homes will continue to take advantage of technological advancement. Don’t be surprised if new innovative ways of marketing begin to more directly target potential homebuyers.
Building apartment complexes will continue to take favor over building condominiums. Developers proliferate in the area and for them building apartments is just an easier process and more sound investment. This in turn means renting options will also continue to proliferate.
Corken + Company is always available to discuss the current market. As experts in the Denver metro area for more than twenty years, we provide real estate solutions without limits. We would love to help you explore your real estate possibilities!
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