Seasonal real estate market trends in Denver have become as unpredictable as the weather. Buyer interest typically declines as the holidays take priority at the end of the year and remains low throughout January, before slowly escalating into a big spring selling season. Not this year! Demand remained strong right through the end of the year and carried over into January, driving the average price for a single family home up to $629,159. That's nearly 19% appreciation year over year! For attached properties, the average price is $397,792, representing an 11.7% increase from one year ago.
Listing Shortage
To say that inventory has been tight in the Denver area is an understatement. This January, the Denver market had 48% fewer active listings than last year. Coupled with increased demand, this shortage drove prices up and it was the first January in years with an average overall close-to-list price over 100%. If you have a home to sell, conditions have never been better for Denver area sellers. Reach out to one of our experienced agents if you're curious about the equity you have in your home or are thinking of listing.
Are we in a housing bubble?
The quick answer...no. The rate of appreciation that we're currently experiencing is not sustainable long-term, however we are not teetering on the brink of a crash. If anything, we'll start to see a more reasonable rate of appreciation once interest rates creep up or prices get high enough to tip the affordability scale and slow demand. The likelihood that homes will start to decrease in value is very low and would require a serious over-supply of homes which we're just not experiencing or predicting right now. For an in-depth look at how today's market conditions differ from the conditions that led to the 2008 housing market crash, check out this recap of our Live & Learn event on the topic, featuring speaker Megan Aller from First American Title.
Micro Market Trends: The Denver Luxury Market
The luxury market in Denver typically lags behind in days on market, odds of selling, and close-to-list price, but demand from the sub million dollar markets has crept up into the million dollar plus price points. Homes between $1-1.5M hit a new high for the odds of selling, a metric that tracks the odds of going under contract or closing within a month. With an average daily active count of just 181 homes for sale in that segment of the market (30% lower than last January)and pending sales up 50% from last year, buyers are scooping up high-end homes in a median of just 8 days on market.
The Denver real estate market never ceases to amaze us, especially with the resiliency and strength it's shown in the past year despite the pandemic. Check back next month to see howthe February stats shake out for area buyers and sellers.
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