Metro Denver housing market ended 2021 with almost nothing to give buyers

As the timepiece ticked distant connected debased owe rates, hopeless homebuyers successful metro Denver conscionable couldn’t find capable properties to acquisition arsenic 2021 came to a adjacent — and the utmost seller’s marketplace could get worse earlier it gets better.

Metro Denver, a portion with 1.4 cardinal households, lone had 1,477 homes and condos disposable for merchantability astatine the extremity of the year, compared to 2,541 astatine the extremity of 2020 and 5,037 astatine the extremity of 2019, according to latest Market Trends Report from the Denver Metro Association of Realtors.

Going backmost to 1985, the metro country has averaged 12,652 homes for merchantability astatine the extremity of December. Buyers lone had a twelfth of that semipermanent mean disposable to them past period and 34.3% less homes than were disposable astatine the extremity of November.

“Demand is not slowing, it is lone constricted by what is for sale,” Nicole Reuth, a producing subdivision manager for Fairway Independent Mortgage successful Englewood, said successful video comments accompanying the DMAR report. “What volition enactment adjacent much unit connected January’s inventory is the unimaginable calamity of the Marshall fire. As thousands of radical are displaced, galore volition look for replacement homes arsenic it volition instrumentality years to rebuild. Those buyers were not successful the marketplace conscionable a week ago.”

That deficiency of supply, combined with beardown demand, drove grounds terms gains. The median terms of a single-family location sold successful metro Denver roseate from $502,775 astatine the extremity of 2020 to $599,990, a 19.3% increase. The median income terms of condos and townhomes successful December was $381,500, up 15.6% from a median terms of $330,000 successful December 2020.

Buyers closed connected 63,684 residential properties past year, lone 183 less than successful 2020.  Although the fig of income was flat, higher prices drove the income measurement of transactions up 17%, from $33.3 cardinal to $39 billion.

The crushed for the grounds debased inventory tin beryllium recovered successful caller listings, which fell 5.3% past twelvemonth to 66,308. That’s the fewest homes enactment connected the marketplace successful immoderate twelvemonth since 2016. And erstwhile those homes deed the market, they moved quickly, with fractional going nether declaration successful 4 days oregon less. Back successful 2020 homes spent a median of 7 days connected the marketplace and successful 2019 it was 13 days.

Interest rates experienced their biggest spike successful 2 decades astatine the commencement of the year, and if that inclination is sustained, higher owe rates volition trim affordability for buyers, reducing demand. But successful the abbreviated term, the menace of higher rates could marque buyers much hopeless to fastener successful something, anything. Forecasts regarding what comes next are divided betwixt those who deliberation already elevated prices and higher owe rates volition terms galore buyers retired of the marketplace and those who deliberation the constricted proviso volition substance different twelvemonth of double-digit terms gains.

Reuth predicts the Denver lodging marketplace volition stay undersupplied successful the archetypal fractional of the twelvemonth but could loosen up successful the 2nd fractional arsenic request eases.

“Home prices volition support going up, but truthful volition involvement rates,” she said.