Video Transcript Below
Did The Denver Housing Market Exceed Expectations in 2021?
Is Denver’s housing market going to remain hot in 2022? Hi, I’m Tristan Colborg with the Denver Real Estate Agent.com. In December 2021, the Denver metro area experienced yet another record-breaking month for sellers. The interest rate remained low throughout 2021, while the demand for home purchases remained high. In 2021, the number of homes purchased increased from any previous year to 63,684, according to DMAR.
The number of properties on the market decreased 5.26 percent while demand was at an all-time high. During the first week of January, Denver Metro area properties on the market were 1,476, which is 11,175 fewer properties than usual.
Home Prices Reached All-Time High
Among the most striking statistics in 2021 were the low inventory level and skyrocketing prices. In 2021 home prices saw an increase of 16.68 percent in the Denver metro area, with the average home being over $610,000. As a result, prices grew for a tenth consecutive year and reached an all-time high. Before 2021, the highest percentage growth was achieved in 2000, when it was 15.77 percent. Also, in 2021, the median price increased 16.67 percent, nearly the same as the increase in the average closed price.
Another good indicator of market direction is months of inventory (MOI), which accounts for active and closed listings. Compared to 2020’s MOI of 1.21, the MOI in 2021 was 0.56, a new record low. The last year Denver averaged greater than 2.0 MOI was 2012. The traditional four- to five-month period in a balanced market is no longer adequate in light of the current trends. Presently, the housing market is heavily in the seller’s favor as we settle into the new normal.
Due to a lack of inventory and the market’s sustained demand for housing, we expect property values to appreciate by double digits this year. A double-digit appreciation year has not happened back-to-back since 1998-2000 and 2015-2016. The future growth of house prices depends on a few factors. The first factor is supply and demand. Compared to January 2021, there are 41.87 percent fewer homes for sale at the start of January 2022.
Increased Buying Power
Second, the conforming loan ceiling increased to $684,250 in the Denver metro area. There is a difference of $37,050 between this and the national conforming limit. With a 10% down payment, buyers can purchase a $750,000 property without incurring a large loan. There seem to be conflicting forecasts for next year, with some predicting higher prices and rising mortgage rates will hurt homebuyers, while others believe a lack of supply will continue to fuel double-digit price hikes.
During December, the median single-family home sale price was $599,900, a flat price from November and an increase of 19,34% from last December. In December, the average closing price was $705,753, a 0.25 percent increase from November and a 15.61 percent increase from the previous year. Single-family homes in 2021 had a close-price-to-list-price ratio average of 103%.
Denver Housing Market 2022 Forecast
Denver’s housing market remains fierce and is likely to remain that way through 2022. That means if you are selling or thinking about selling your home, you can expect high demand, increased pricing, fewer negotiations, and generally better terms for you. If you are a buyer in 2022, things will still be difficult but not impossible. It would be best to have an agent who can negotiate and create solid offers that put you at the top of the seller’s list.
Again I’m Tristan Colborg, “The Denver Real Estate Agent,” and I hope you found this information helpful. Be sure to subscribe to my Youtube channel for all my latest real estate videos. If you need an agent to help you in your real estate journey, reach out. As a Certified Negotiation Expert, I can help you through this crazy housing market as a buyer or a seller. Thanks for watching, and remember, you deserve an elevated real estate experience.