Denver’s real estate housing market continues to have record-low housing inventory. Here are some quick stats to illustrate the point…
- Average active listings for December are 12,941 (1985-2020).
- Record-high December was 2007 with 24,603 listings.
- Record-low December was last month with 2,541 listings.
2021 will another strong year in housing as our economy reboots as we go back to work, ball games, restaurants and travel. GDP growth is expected to hit 3.5%, unemployment 6.2% and household spending 3.7%. Housing prices are expected to climb 8%, sales up 6%, all while rates start inching up to 3%. It will be a great year to be a buyer or seller.
Let’s take a look at the Denver housing market reports with data from last month.
Denver Housing Market Update — Reported for January 2021
Denver Market Trends by the Denver Metro Association of Realtors
Denver Housing Market Year-End 2020 Review, by DMAR
Metro Denver Housing Market Review, reported in January 2021
By Megan Aller at First American Title
Projections for 2021, in her own words:
- The Big Short of inventory is expected to remain low in 2021 despite builder’s best efforts to keep up with surging demand. This is likely to keep house price appreciation flying high.
- Mark Fleming Chief Economist, First American Title, source article here: https://firstam.us/2XwhBUB
- Interest rates are expected to remain low for the foreseeable future and millennials will continue forming households, keeping demand robust, even if income growth moderates.
- Mark Fleming Chief Economist, First American Title, source article here: https://firstam.us/2XwhBUB
- Typical inventory historically in Metro Denver begins to rise in March annually and grows until September. Unless a vaccine is widely adopted, and a vaccine is in place we may see a delay of inventory entering the market until a vaccine is in place.
- With interest rates at continued and expectedly sustained levels below 3% or near there, buyer demand and refinance activity will continue. With more homeowners refinancing, when interest rates begin to climb it may create future inventory shortage for longer periods of time, stretching into years to come. Rather than homeowners choosing to move when interest rates increase many may choose to renovate and remain in their current home.
- The trend towards purchasing larger homes, in more suburban areas specifically to the west of I-25 with more rooms to allow for families to work and educate from home is likely to continue.
- Downtown markets, more urban densely populated areas have experienced drag and a slowdown in the velocity of sales and appreciation due to COVID-19. It is likely this market will remain on pause until life post-pandemic begins to return to normal where the city center residents will be able to enjoy all of the activities that comes with living in Downtown are restored. These activities would include sporting events, indoor dining, nightlife, theatre and use of common spaces and amenities in HOA condominium buildings.
- Once a vaccine is in place, consumer spending and activity will increase across the board, which will allow people to return to work thus increasing GDP and inflation. Without government intervention regarding rising inflation and its possible effect of increasing interest rates affordability due to rising interest rates will decrease purchasing power very quickly.
Supporting First American Articles can be found here:
by Mark Fleming, Chief Economist, First American
Will the Super-Sellers’ Market Continue to Impact Affordability in 2021? https://firstam.us/3oG3bwP
What Will Drive Housing Market Potential in 2021? https://firstam.us/38D3iUr
The Five Cities Where Affordability Declined the Most. https://firstam.us/3i5rr9c
This Time it’s Different – Why a Wave of Foreclosures is Unlikely. https://firstam.us/39oGVBf
by Odeta Kushi, Deputy Economist, First American
Will Record Equity Levels Prevent a Foreclosure Tsunami? https://firstam.us/2LMLgWF
Homeownership Remains Strongly Linked to Wealth-Building. https://firstam.us/2LuOxu1
Greater Denver Housing Market Update
Source: Land Title
VIDEO: 2021 Economic Summit
DMAR‘s Economic Summit is an annual event featuring key economic experts who share their outlook on local, state and national financial & economic trends. After the rollercoaster that was 2020, everyone wants to know… what does the road ahead for the U.S. economy look like? Watch below to find out! Our four experts update us on the health of the housing market, real estate trends, interest rates, housing inventory, local and national economic forecasts and more.
Speakers:
- Elliot Eisenberg, President & Chief Economist for GraphsandLaughs, LLC and a nationally acclaimed economist & public speaker
- Patty Silverstein, President & Chief Economist of Development Research Partners
- Kelly Brough, President & CEO of the Denver Metro Chamber of Commerce
- Andrew Abrams, Chair of DMAR’s Market Trends Committee and Employing Broker at BSW Real Estate
- Nicole Rueth, Producing Branch Manager at Fairway Independent Mortgage Corporation
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