The Denver real estate market continues to appreciate at remarkable rates despite a year that's been challenging in many other ways. At this time last year, we were all preparing for lockdown and scrounging for toilet paper. One year later, there is a light at the end of the tunnel with the rollout of the vaccine and some parts of the Denver metro area atLevel Blue on the Covid Dial. Despite the uncertainty of the past year, the Denver housing market has provided necessary stability and somehow continues to break records each month. February was no exception.
Notable Stats for February
The most shocking reveal from the February market trends report is the 23% year-over-year rise in average sales price for detached homes in the Denver metro area, especially when we keep in mind that the stats from last February were not yet impacted by Covid. The detached marketcame in strong as well with a 15% gain in average sales price from last year. Also notable is the 102.54% average sold-to-list price for detached homes and a median of just 4 days on market, down 75% from last year.
Not Enough Inventory to Outpace Demand
Inventory is relative, driven by supply and demand, which is why when we look at the active listings at the end of February, we see another broken record for low inventory with 58% less than last year. However, when we track closed and pending listings, we see that they are up 3.7% and 7% respectively. In fact, last month was the highest number of closings for any February on record. The story this really tells isa tale of insatiable demand and the best conditions for sellers that we've ever seen.
Mortgage Rates Fluctuating
Mortgage rates have crept back over 3% for the first time since July of last year. Rates are expected to fluctuate and rise this year with the economic recovery, but are still well below the 20 year average of 4.9%. Last year at this time, buyers were excited about the low 3.5% interest rates, this year that number seems high. Buyers were gifted several months with rates in the 2% range, but there was no way they could stay that low long-term. Rates are predicted to stay in the 3%'s for 2021 and slowly break into the 4% range in 2022.
Will the slight rise in interest rates deter Denver area buyers enough to equalize supply and demand? How long can we sustain double digit appreciation? Check back next month as we report on the trends for March.
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