Denver is located at an elevation of 5200 feet. Certain individuals must first acclimate to the elevation in order to live there. Denver real estate is expensive, and the market, like many others, is experiencing a shortage of inventory. Despite this, the median home price in Denver has increased by less than 1%. Luxury homes, on the other hand, may be an exception to this rule. The scarcity of raw materials has resulted in an increase in new home prices worldwide. When areas such as Aurora and Colorado Springs are included, the picture changes dramatically and the nature of demand in the local housing market becomes clear.
Colorado’s great outdoors, pristine mountain views, and a variety of other factors have attracted people in droves. The more people who move to cities, the greater the demand for housing. Traditional supply and demand models, combined with the fact that there is a finite supply of land and builders are unable to keep up, have resulted in skyrocketing real estate prices. Each day, Denver receives an average of over 35 new residents. California has priced out a large portion of its population and shares Colorado’s sunny skies, which has prompted many residents to relocate to Denver and other desirable Colorado cities such as Aspen, Steamboat Springs, and other great ski destinations. While many people desire to live in ski towns, the prices are exorbitantly higher. When you look at the current markets in these areas, the intensity of demand is apparent. The Aspen real estate market is one such example.
Denver has consistently ranked as one of the best cities for career advancement. The state supports a diverse range of industries, including oil and gas, technology, manufacturing, tourism, and mining. These sectors have expanded across the front range and beyond. Colorado has a historically low rate of unemployment, even during the COVID-19 recession. In July 2020, Colorado’s centennial state (Colorado) had a 7.4 percent unemployment rate, compared to the national rate of 10.2 percent. This is aided by the fact that nearly 50% of Denver residents have a bachelor’s degree or higher, according to the United States Census. These low unemployment rates have resulted in wage increases, but also in an increase in the cost of living. These job opportunities have increased further as downtown has grown due to the installation of the light rail. Keep in mind, over 50% of the workforce in Denver has a Bachelors’s Degree or higher.
Will Denver’s housing market remain hot in 2021? In March, the average price of a single-family detached home in the Denver metropolitan area was $674,990. The median price was $560,000, an increase of 15% year over year and 5.66 percent month over month. According to a recent report released by the Denver Metro Association of REALTORS®, detached homes saw a 27% increase in closed sales in March, while attached homes saw an 11.62 percent decrease in closings.
In February, the average price of attached properties in the Denver metro area surpassed $400,000 for the first time. It increased by 4.41 percent to $416,775 in March. Whether you’re looking at detached or attached homes, Denver is a seller’s market. Homes are selling for significantly more than their asking prices, and sellers are profiting handsomely.
The close-price-to-list-price ratio increased to 103.32 percent in March, according to the DMAR Market Trends Committee. Annual appreciation for all residential properties (detached plus attached) is 15.26 percent this March, from $511,511 to $589,587, while month-over-month appreciation is 6.90 percent from $551,542. The Denver housing market remains extremely competitive, and it remains consistently skewed toward property owners across almost all price segments.
Property sales are also moving at a faster clip than they were last year. The median number of days on market is four, three fewer than in March 2020. Homes stayed on the market for an average of 19 days, down 11 days from last March and 5 days from last month. Single-family homes remained on the market for an average of 15 days, while attached properties remained on the market for an average of 26 days.
The reason inventory is so low is that sellers have failed to match the level of enthusiasm displayed by buyers during this pandemic. As more people become vaccinated, we may see an increase in spring and summer listings. At the moment, new detached listings have increased by 28.03 percent to 402, up from 314 last month.
This barely kept pace with pending sales, which peaked at 399, a 26.27 percent month over month increase. Additionally, new listings in the Luxury Market (sold for $1 million or more) are falling short of buyer demand. Home prices and appreciation continue to soar month after month, resulting in an increase in the number of homes that cross the Luxury Market threshold.
The following are some of the highlights from DMAR’s most recent monthly report on the “Metro Denver housing market.” Metropolitan Statistical Area (MSA) reports detail housing market statistics for the Denver metro region, which has a relatively dense population center and strong economic ties throughout. It encompasses the counties of Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park in the Greater Denver Metro Area. The following table compares March 2021 to March 2020.
Sellers’ New Listings are not keeping up with demand in the Denver Metro market, which has pushed available inventory to another record low. At the end of March, the Denver Metro Area’s 11-county area had just under 2,000 Active Listings for sale. We saw 4,889 closings and 5,799 contracts written on listings throughout the month. Demand continued to drive home prices higher, with the median price of a single-family home increasing 15.46 percent year over year to $560,000.
(Residential) 1,921 is the lowest inventory level ever recorded. The previous low was 2,024, set in February 2021.
(Detached) 1,122 is the lowest March figure ever recorded. The previous record low was 3,325 active listings in 2015.
MEDIAN RETAIL PRICE
(Private) $500,000 is the highest amount ever recorded. The previous high was $475,00 in October 2020.
(Detached) $560,000 is the highest sum ever recorded. The previous high was $530,000 in February 2021.
(Attached) $353,000 is the highest sum ever recorded. The previous high was $337,500 in February 2021.
AN APPROPRIATE SALES PRICE
(Private) $589,587 is the highest amount ever recorded. The previous high was $559,872 in October 2020.
(Detached) $674,990 is the highest sum ever recorded. The previous high was $632,481 in February 2021.
(Attached) $416,775 is the highest sum ever recorded. The previous high was $399,190 in February 2021.