Buying and selling real estate, specifically residential, during the pandemic has bewildered and amazed. The national need for caution created a surge in demand for live-work environments. While the initial surge in “Zoom” ($ZM) calls and remote working took place, families quickly realized that 24/7 at home meant a need to ensure the home could handle everyone’s needs. Parents, normally caught in highway traffic, now navigated extra time with their sons and daughters in between screen time with the office. The expansion needs of not enough space has been felt in housing. Homes are, when priced competitively and updated, finding multiple offers and quick sales. Location more than ever matters.
In Denver, where supply has been a problem for a few years, the urban core has seen an increase in available homes-condos specifically. Pricing has trended downward for high-rise properties in the short-term. When compared to a year earlier, a buyer has approximately 200 units vs 100 condos to consider in any given month. The decline in high-rise pricing has as much to do with the pandemic in America as it does with the urban protests set off by highly visible civilian deaths. In the background, the shortage of affordable housing has left an urban blight which is impacting urban living desirability. The unattended homelessness found throughout because of affordability in the United States is impacting many communities.
Contrarily, just beyond the city center, listings which are updated and contemporary are receiving multiple offers. Luxury homes, above $1mm are peeking buyer interest because the increase in willing sellers has found a downsizing suburban buyer and migrating coastal city dweller (San Francisco and New York specifically). This is only true if the property has enough space (existing or potential). Those who do not have to sell are indeed staying in place. Metropolitan new listings in Denver are down from a year earlier by more than 50%. According to the Denver Metro Association of Realtors, Denver’s supply for detached homes in September was 3041 vs 6523 a year prior!
The beneficiaries in today’s housing market are home accessory, home improvement stores and builders. Disposable incomes are greatly affecting buyer preferences. In East Hampton, Sothebys and Phillips, have established outposts for their clientele’s convenience. The larger galleries found in New York City have also ventured to the enclaves of the wealthy. As the weather turns, migration to luxury second home destinations like Palm Beach, FL will experience similar luxury retail pop-ups. Those who remain flush will continue to seek the best opportunities. Luxury goods, services and homes will remain the beneficiary because of perceived and actual supply limits. Combined with aspirational consumer habits, quality homes and their included furnishings will retain their pricing power.