The Metro Denver housing market ended with virtually no stock for consumers in 2021

As the clock passed on low mortgage rates, desperate metropolitan Denver homebuyers simply couldn’t find enough homes to buy by late 2021 – and the extreme seller market could deteriorate before it gets better.

Metro Denver, a region of 1.4 million households, had only 1,477 homes and condos for sale at the end of the year, compared with 2,541 in late 2020 and 5,037 in late 2019. Denver Metro Association of Realtors.

Since 1985, an average of 12,652 apartments have been for sale in the metropolitan region at the end of December. Last month, only a twelfth of the long-term average was available to buyers and 34.3% fewer apartments than at the end of November.

“Demand is not falling, it is only limited by supply,” said Nicole Reuth, a manufacturing branch manager for Fairway Independent Mortgage in Englewood, in the video commentary on the DMAR report. “What will put even more pressure on inventories in January is the unimaginable tragedy of the Marshall Fire. With thousands of people displaced, many will seek replacement housing as rebuilding will take years. These buyers weren’t on the market a week ago. “

This lack of supply, combined with strong demand, resulted in record price gains. The median price of a single-family home sold in the Denver metropolitan area rose from $ 502,775 in late 2020 to $ 599,990, an increase of 19.3%. The average sales price of condos and townhouses was $ 381,500 in December, up 15.6% from an average price of $ 330,000 in December 2020.

Buyers closed 63,684 homes in the past year, just 183 fewer than in 2020. Though the number of sales remained unchanged, higher prices propelled transaction sales by 17%, from $ 33.3 billion to $ 39 billion .

The reason for the record-low inventory is the new entries, which fell by 5.3% to 66,308 in the past year. These are the fewest houses that have been launched on the market since 2016. And when those homes hit the market, they moved quickly, with half signing in four days or less. In 2020, houses spent a median of seven days on the market; in 2019 it was 13 days.

Interest rates saw their sharpest spike in two decades earlier in the year, and if this trend continues, higher mortgage rates will decrease affordability for buyers and decrease demand. But in the short term, the threat of higher interest rates could lead buyers to buy something or anything. The predictions of what comes next are divided between those who believe that already high prices and higher mortgage rates will drive many buyers off the market and those who believe that the limited supply will fuel another year of double-digit price gains .

Reuth predicts that the Denver housing market will remain undersupplied in the first half of the year, but could ease in the second half as demand declines.

“Real estate prices will continue to rise, but so will interest rates,” she said.

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