The Denver, Colorado real estate market has officially entered turbo mode. So lower your safety bar and get on your way, home buyers.
The Denver metropolitan area is one of the fastest moving housing markets in the country, according to a recent statewide housing report. At least among the 50 largest metros in the nation.
And that’s not surprising when you consider the supply and demand situation in the Denver real estate market. Steady declines on the supply side and strong activity on the demand side have made it one of the hottest real estate markets in the country in 2021.
Denver, Colorado: A Turbocharged Housing Market
In late April, Realtor.com’s research team released a property market report with data for the country’s 50 largest metropolitan areas. According to this report, the Denver-Aurora-Lakewood property market is currently one of the fastest in the country (among major cities).
In particular, this report showed that the Denver metropolitan area had the lowest median number of “market days” among the largest metropolitan areas in the country. Basically, this means that homes are contracting faster in the Denver housing market than the other 50 metropolitan areas examined for this report.
In April 2021, properties listed for sale in the Denver-Aurora area had been in the market for an average of 15 days. That was 19 days less than last April and the lowest level among the 50 largest metropolitan areas in the country.
To quote the Realtor.com report:
“In the 50 largest US metropolises, homes sold even faster, averaging 34 days, compared to 50 in April 2020. In Denver, homes sold in an average of 15 days, while the average market time in Columbus, Ohio was only 16 days and 18 Days in Austin, Texas. “
These statistics confirm something we already knew. In 2021, the Denver, Colorado real estate market will be one of the most active and competitive in the country.
Supply and demand have a lot to do with it. Like many major cities across the country, Denver currently has very low inventory levels relative to the number of buyers looking for homes. These one-sided market conditions boosted property prices over the past year while also making the Denver property market one of the “fastest” in the country.
Related: Why a Home Crash Is Unlikely in 2020
A sharp drop in the number of property adverts
As mentioned above, the tight storage conditions made the Denver real estate market very competitive in 2020. Not even the coronavirus pandemic was able to slow this busy real estate market. And these underlying forces will remain intact in 2021. In fact, inventory levels have worsened over the past year.
According to the aforementioned report, the total number of active listings in the Denver subway housing market declined -57% from April 2020 to April 2021. The supply was already low a year ago. What we have here is a tight real estate market that has tightened over the past year as more and more home buyers move to the area.
As of spring 2021, the Denver, Colorado real estate market also has a high percentage of properties that are selling above the original list price. This, too, suggests a glowing residential scene with stiff competition among buyers. Multiple offer scenarios are common as buyers try to outsmart each other.
However, a light can emerge at the end of the tunnel if buyers are struggling to find a home in the Denver area real estate market. While the total number of active property listings declined over the past year, new registrations rose 59% in April 2021. This means that more new offers are popping up today than a year ago.
So from an inventory perspective, we could see the beginning of a positive trend. With more homes coming on the market in the future, home buyers could find property more easily. This trend could help rebalance the Denver real estate market at a time when such balance is sorely lacking.
A strong real estate price prediction for the Denver area
With all of the trends outlined above, it should come as no surprise that property prices in the Denver area have increased steadily over the past year. And the forecasts for the real estate market predict more of it for the future.
According to real estate data company Zillow, the median home value in the Denver-Aurora metropolitan area rose roughly 11.3% last year. Looking ahead, the company predicts that property values will rise 11.6% over the next 12 months. (This real estate market forecast for Denver was published in late April 2021, so it extends into spring 2022.)
House values in the region have risen significantly over the past 10 years. Consider the evidence:
- In May 2021, the average home price in the Denver metropolitan area was around $ 520,000.
- Ten years ago the average price was $ 236,000.
This means that real estate prices in the Denver area real estate market have more than doubled in the past decade. What used to be a relatively affordable real estate market is quickly becoming unaffordable for a growing number of local residents.
This is a pattern we’ve seen in other major cities in the country, particularly the Seattle area. If the Denver real estate market continues to see rapid growth in prices, more and more home buyers in the area will be “priced out”.
Steady population growth adds fuel to the fire
We covered the supply side of the Denver real estate market in 2021. Despite a recent surge in new real estate offers, the total housing stock remains very low from a historical perspective. There are simply not enough homes in the market to meet buyer demand. It’s not even near.
And that demand seems to be increasing too. Home sales activity has increased over the past year, mainly due to steady population growth.
According to the US Census Bureau, the population in the city of Denver grew by more than 20% from 2010 to 2019. The city’s population was north of 700,000 at the last measurement. Today around 3 million people live in the wider metropolitan region. And these numbers keep increasing.
In view of the tense supply conditions and the growing population, property prices in the region are likely to continue to rise for the foreseeable future. So it’s no wonder that the real estate market outlook for Denver and the surrounding area will develop positively through 2022.
Disclaimer: This report contains predictions, projections and other forward-looking views made by third parties that are not affiliated with the publisher. Property predictions are an educated guess and should be treated as such. The Home Buying Institute makes no claim to future housing or economic conditions.