Within the Denver metropolitan space housing market, double-digit value will increase are broadcast in 2021
The worsening imbalance between supply and demand in Metro Denver has started with a double-digit appreciation in home prices every year, according to the Denver Metro Association of Realtors’ Market Trends Report released Wednesday.
The average price of a single-family home closed in January in the Denver metropolitan area rose 2.9% from December to a record $ 629,159. The annual price increase is a hot 18.7%. However, this strong increase reflects the increasing dominance of more expensive homes in the market.
For example, 70% more homes worth $ 1 million or more were sold in the last month than in January 2020, while 45.4% fewer homes were sold in the $ 300,000 range and an 11.2% decrease in homes sold in the $ 400,000 range.
The average price, or the point at which half the houses sold for more and half for less, was $ 510,000 for single-family homes. That is an increase of 1.3% compared to the previous month and 10.9% compared to the previous year. The last time Metro Denver started a year of double-digit average price gains was January 2018.
Condos and townhouses had an average closing price of $ 397,792 and an average closing price of $ 339,000. The average price increased by 2.5%, the median by 2.7% on a monthly basis and 11.7% and 11.15% annually.
“As the shift to more space and lower interest rates continues to drive demand, the active inventory continues to decline to historic lows at month-end,” said Andrew Abrams, chairman of the DMAR Market Trends Committee and local broker.
After an all-time low at the end of December, the number of active listings fell again by 8.9% to 2,316 in January. There were fewer than half as many properties to choose from in the last month as there were buyers in January 2020 and 83% fewer options compared to the average inventory since 1985.
This decline in inventory only partially reflects a decline in new entries, which fell year-on-year by 14.5% for single-family homes and 10.6% for condominiums.
Compared to December, closings fell by 42% to 3,015 properties and fell by 10.3% over the course of the year. Abrams notes that pending sales are holding up much better and are at the same level as last year.
The decline in sales can be explained by the lack of options available to buyers trying to capitalize on the Federal Reserve’s historically low mortgage rates to stimulate the economy.
“We believe interest rates could be pushed up a bit,” said Ali Wolf, chief economist at Zonda, in a webinar last week. Wolf expects the 30-year mortgage rate this year to be between 2.9% and 3.4%, higher than at the end of last year. That makes buying a home less affordable, but it shouldn’t derail the market, she said.