COVID-19 and Denver Real Estate

Denver Business Journal:

Far from 'business as usual': How Denver's residential real estate sector is operating amid COVID-19 restrictions

The real estate industry successfully fought to be included among the "essential businesses" allowed to continue operations for the duration of Colorado's stay-at-home order, which began March 26.

But industry associations are reminding members that they still have a duty to slow the spread of the coronavirus, and residential agents and brokers are adjusting to a significant slowdown in a market that as recently as mid-March appeared to be firing on all cylinders. “What we have to be mindful of is that it’s not business as usual,” said Euan Graham, chairman of the board of Denver Metro Association of Realtors. “It’s just critical business that needs to be conducted right now. Realtors shouldn’t be going out and soliciting new business at this time. If somebody really needs to buy or sell, that’s the client that needs our service right now.”

When Denver Business Journal spoke with brokers and lenders early in the week of March 16, they had just finished a busy weekend filled with showings and multiple offers on properties in the metro. Industry insiders were beginning to hear of more buyers and sellers holding off, but the market remained strong.

Since then, as the gravity of the pandemic sets in across the country, Denver and Colorado have steadily seen heightened restrictions on gatherings and business activities, culminating in a statewide stay-at-home order that will last at least until April 11.

The original order, announced March 25, did not include real estate transactions among the list of essential business activities. An update the next day did specifically name "professional services, such as legal, title companies or accounting services, real estate appraisals and transactions," among the list of critical activities, after industry groups pushed for a change to the order.

But Graham points to that initial omission as evidence that the industry should be pressing pause on all but the most critical in-person activities.

"It's not a time to go out and celebrate that we can go out and sell real estate," Graham said.

Andrew Abrams, who owns and operates Denver-based brokerage A-Squared Real Estate, said the buyers and sellers who don't need to move are now retreating to the sidelines. But those who are motivated to get into a new home are still looking at properties. And if someone does physically visit a property, the chances of them moving forward are much higher.

"From what I've seen within the real estate community, everyone is being really supportive on the same mission, which is safety," Abrams said. "While we are essential, we're taking that very conservative approach."

A decline in the number of homes going up for sale could put more strain on a Denver market that is already starved for new inventory. Jill Schafer, chair of DMAR’s Market Trends Committee and a broker at Kentwood Real Estate, previously told DBJ this would likely be felt most in the middle of the market, which includes “attainably priced” homes in the $300,000s to upper $500,000s.

After the Denver stay-at-home order was implemented, Schafer told DBJ the industry saw a dramatic drop in showings.

"Everyone's holding back until we get more information on how long this will last," Schafer said.

According to ShowingTime, which provides software and market statistics for the residential real estate industry, the average number of daily showings in Colorado for the week ending Sunday, March 29 was down nearly 46% from the start of the year. At the same point last year, it had been up 36%.

"We're not telling sellers to lower their prices," said Jon Larrance, CEO and owner of Perry & Co., a boutique real estate firm based in Denver. "If things are priced right, it's just an issue of eyeballs."

Companies and individuals involved in transactions are trying to get creative to make sure they're completed as safely as possible. Virtual tours have, of course, become essential for homes that are still being sold. Title companies are implementing closing procedures that take place in separate rooms so that parties don't come into contact with each other.

On March 27, Gov. Jared Polis also issued an executive order temporarily eliminating the requirement for individuals to personally appear before a notarial officer for signatures or statements. Instead, remote notarizations using audio-video technology will be possible.

For homeowners that are moving in or out of the state, or dealing with divorce or the death of a family member, it's important that those transactions continue, Graham said.

"These types of scenarios continue to happen," Graham said. "They don't just stop because of the coronavirus."

Please reach out to me if you have any questions whatsoever regarding the Denver market at this time! Please stay healthy and safe!

Elise

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