Throughout the ebbs and flows of 2021, interest rates remained low and buyer demand stayed consistently high. DMAR found there were more homes purchased in 2021, 63,684 more than any previous year.
While demand was at an all-time high, the number of new listings that hit the market throughout the year was down 5.26 percent, which is one of the reasons why the market ended the year with another historic indicator, month-end active listings.
At the beginning of January, there were only 1,477 active properties on the market in the entire Denver Metro area, which is 11,175 fewer houses on the market than normal. Based on the sustained demand for housing and lack of inventory, the market is projected to see double-digit appreciation this year, which it has not seen in back-to-back years of double-digit appreciation since 2015-2016 and 1998-2000.
There are a few factors that will dictate this continued acceleration in house prices. The first is supply and demand. There are currently 41.87 percent less houses on the market at the beginning of January 2022 than there were at the beginning of January 2021. The second factor is that conforming loan limits increased to $684,250 in the Denver Metro area. That is $37,050 higher than the nationwide conforming limits. This means that the majority of buyers can purchase a home for $750,000, putting down 10 percent without it turning into a massive loan.
“Last year, when comparing year-over-year data, it felt easy to call 2020 an outlier year,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “As we forecast 2022, it is a fair assumption that what was previously an outlier is quickly becoming the norm. With the historic lack of supply and continued demand, cities may start to change their policies but that won’t solve the problem in the short term. If you are a buyer in this market, setting the right mindset is incredibly important. In such a demanding and stressful process, it is imperative to work with a professional to help you navigate.”
Through hardship and perseverance, the Denver Metro real estate market has been the backbone of Colorado’s economy. The question remains whether the market will see significant changes in the real estate market from last year. In this market, time is money and it’s likely not to change soon.
Our monthly report also includes statistics and analyses in its supplemental “Luxury Market Report” (properties sold for $1 million or greater), “Signature Market Report” (properties sold between $750,000 and $999,999), “Premier Market Report” (properties sold between $500,000 and $749,999), and “Classic Market” (properties sold between $300,000 and $499,999).
In the Luxury Market, Denver Metro prices continue to climb with more homes entering the ranks of the Luxury Market every month as demand continues at a rapid pace. Within the past two years, the number of homes that sold within the Luxury Market more than doubled. The single-family segment of the market closed 4,672 single-family homes, a 53.99 percent gain year-over-year, while the attached segment experienced a 140.46 percent gain with 630 homes sold.
During the holidays, the seasonal slowdown was palpable, and as a result the number of new listings and pending and closed properties traditionally shows a sharp drop off with the focus on real estate. While active homes on the market dropped 41.87 percent market-wide, the Luxury Market continued to outperform with a five percent increase in December for new listings.
New listings for detached homes climbed slightly by 1.40 percent from last December, while closed listings increased 9.06 percent. Even with a seasonal shift, the average days in MLS fell 30.19 percent to 37 days and median days in MLS dropped 59.09 percent from 22 days to nine compared to last December. Meanwhile, the attached market continued to shine as new listings climbed 35.29 percent year-over-year with 23 new listings. Closed sales came in at a staggering 89.66 percent gain with sales volume following closely with a 75.36 rise with $75,932,105 closed volume.
“As we head into 2022, the Luxury Market will continue to stay strong,” said Libby Levinson, DMAR Market Trends Committee member and Metro Denver Realtor®. “As home prices continue to soar coupled with increased conforming loan limits, I expect to see similar numbers next December. Additionally, we tragically lost almost 1,000 homes in the Marshall and Middle Fork fires, with many of those homes falling within the Luxury Market. The loss of those homes puts further pressure on an already tight real estate market.”
Additional monthly Mortgage Market Trends Insights brought to you by The Rueth Team of Fairway Mortgage, the Exclusive Partner of the Denver Metro Real Estate Market Trends Report.
