Will denver’s housing market remain scorching hot throughout 2022?
More homes were purchased in 2021 in the metro Denver area than in any previous year in recent history with a total of 63,684 homes sold last year, according to the Denver Metro
Association of Realtors (DMAR). While demand was at an all-time high, new listings on the market fell 5.26 percent throughout the year.
At the start of 2022, metro Denver had only 1,477 active properties on the market, which is 11,175 fewer than normal. Due to sustained demand for housing and a lack of inventory, the market is expected to experience double-digit appreciation throughout 2022. It will be the first time since 2015-2016 and 1998-2000 when Denver saw back-to-back years of double-digit appreciation.
According to DMAR, the Denver housing market is currently up 129.88 percent year over year. The average sales price jumped 9.02 percent, or $58,418 last month. The market continues to advance rapidly, albeit at a slower pace than in recent months. It could be due to the recent increase in inventory. The slower pace will be noticed in the coming months, providing the illusion of more balanced market conditions. The luxury segment is booming with offers of even $300,000 over the asking price.
The latest report from DMAR shows that with an average sales price of $705,812 and rising interest rates, many buyers who saw their potential monthly payments skyrocket gained a reprieve. From February to March, month-end active inventory increased by 81.16 percent.
The additional 995 new listings on the market at the end of the month helped to marginally improve the supply-demand balance. While the percentage rise is significantly greater, such low initial values result in a greater percentage change. Along with the 43.57 percent increase in new listings, this will help balance out the market’s recent fast price appreciation.
The median price of a single-family home sold in April was $660,000, which is up 3.9 percent from the previous month, representing a 17.65 percent increase from this time last year. The average closing price was $797,700, an 8.02 percent decrease from February and an 18.11 percent increase from the previous year. The detached and attached segments both had close-price-to-list-price ratio averages of 106.73 and 105.86 percent respectively. A high list-to-sell ratio indicated a healthy real estate market in which buyers and sellers negotiate less over the sales price.
The competition in the Denver housing market remained fierce, and it is consistently skewed in favor of property owners across almost all price ranges. With record-high sales prices, rising interest rates above 4.5 percent, and an average close-price-to-list-price ratio of 106.46 percent, a typical buyer’s monthly mortgage payment has never been greater.
According to DMAR, the luxury market remained strong overall last month. Buyers saw the largest rise in the inventory of any price point. House hunters in the $1 million-plus range felt some relief from the historically tight market with a 58.22 percent increase in the detached market and a 60.53 percent increase in the attached market for the number of homes available for purchase from February/March.
Even as inventories increased, bidding wars continued, with luxury properties selling for an average of 7.66 percent above list price. The average price of a luxury home grew 7.8 percent month over month, continuing a trend that began at the start of the year.