Denver real estate took a hit in April as the impact of the COVID-19 pandemic rippled through the housing market.
The number of new listings in the metro tumbled nearly 30 percent from March, according to a report from the Denver Metro Association of Realtors. They fell 37.8 percent compared to the same time last year, the report found. New contracts on homes dropped 45 percent compared to a year ago.
Social distancing measures that banned in-person showings and kept potential buyers locked down in their homes are behind the drop, said Jill Schafer, chair of the association’s trends committee and a broker for Kentwood Real Estate. Showings came to a standstill in mid-April, with sellers resorting to virtual tours and FaceTime to market their homes.
Schafer anticipates a relatively rapid recovery. Buyers have been locked out of Denver’s real estate market as demand persistently outpaces supply.
“We went into the pandemic with record pricing and record interest in sales,” Schafer said in an interview. “This is a dip because of the unusual circumstances. I do think we will come back quickly.”
Showings surged when the most stringent guidelines under the state’s stay-at-home order were lifted in late April, according to the association’s data. Still, activity remains muted relative to the number of showings recorded before the lockdown began, and were down 50 percent last weekend compared with the first weekend in March, the data show.
The COVID-19 pandemic threatens nearly a decade of booming growth in Colorado’s real estate market, which has been one of the hottest in the U.S. Job losses and economic uncertainty will keep some buyers on the sidelines even when people are allowed to visit homes more freely.
Prices in most segments of the Denver real estate market were largely stable, ticking up slightly over a year ago. But the average price fell from month to month.
The pandemic hit the luxury segment particularly hard. High-end buyers have seen declines in their stock holdings and tighter lending standards for large mortgages, according to the realtor association. Prices for homes priced at $1 million and above were down 33 percent compared to the previous month and 1 percent from a year ago, the report found.
For now, the metro area real estate market continues to be tilted in sellers’ favor for more modestly priced houses. There was less than one month of inventory for homes priced between $300,000 and $399,999 in April, according to the association. On the other end of the spectrum, there was more than seven months of inventory for condos priced at $1 million or more.
Overall, realtors are optimistic that people will buy homes during the peak summer selling season ahead, Schafer said.
“There will be some impact from the economic uncertainty, people losing their jobs, et cetera,” Schafer said. “I don’t know that that will have the biggest impact.”