Denver, CO

Denver Real Estate Market in 2021 and Outlook

Mile High Real Estate

tl;dr Real estate price in Denver has skyrocketed in the last two years, but things are changing.

With record-low interest rates and the record-high stock market, the Denver housing market was also hot in 2021. Even with the pandemic, listing prices raised as much as 20% year-over-year by end of 2021. Note that the year-over-year growth is only around 10% beginning of the year. As the rent price will react to the rising prices, higher housing price also contributes to the overall inflation rate.

From redfin, new listings have been pretty stable year over year with 2020 H1 having a big drop as COVID has widely spread in Denver. With the Fed interest rate almost zero over the years, the mortgage rate has also stayed stable. Rising prices are mostly due to the high demand.
Median Sale PriceRedfin
Listing PricesRedfin
Housing Sales in 2021Redfin

However, in Q4 2021, although the listing prices have risen 20% YoY, the actual sales price has risen only less than 10%. With the number of listings staying stable, it seems our real-estate owners are listing with higher and higher prices but the buyer is becoming more reasonable. Buyers are not rushing into the housing market which is normally considered a good investment amid high inflation times. The most possible reason is that we have a low volume (we do see that there are 80% of houses close in 2 weeks beginning of 2021, but with only 60% at end of 2021).

With even higher inflation and the Federal Reserve going to raise rates for real, the outlook is grim for the housing market. High prices and higher rates will even lower the demand. With a lot of houses bought with record-high prices in 2021, there will be selling pressure to realize the profits before it's too late.

Disclaimer: this is not investment advice.

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