The Denver, Colorado real estate market appears to be in turbo mode, and it could be one of the hottest real estate markets well into 2023.
A recent report showed that Denver has one of the most fast-paced housing markets among the nation’s major metro areas. Additionally, it has one of the lowest levels of inventory when measured by property listings. It’s no wonder why home prices have risen so much.
Here’s a look at current trends within the Denver Metro area real estate market, along with a forecast into 2023.
Denver Housing Market Moving at Warp Speed
At the end of March, the research team from Realtor.com published an updated housing market report with data for the nation’s largest metro areas. Among other things, the report showed the median number of “days on market” for each metro area.
The median days on market (DOM) metric basically shows how quickly homes are selling, once they have been listed for sale. A lower number indicates a faster-moving real estate scene, while a higher number reflects a slower housing market.
In that March 2022 report, the Denver-Aurora-Lakewood metro area had the lowest median DOM among the nation’s largest metros. As of March, homes listed for sale within the Denver-area housing market spent a median of just nine days on the market. And that was seven days lower than a year earlier.
So we have a situation where an already fast-paced real estate market has become even faster. And when you look at the housing inventory situation in the Denver area, relative to buyer demand, it’s easy to understand why.
One of the Lowest Inventory Levels in the Country
The March 2022 Realtor.com report mentioned above also showed that housing market inventory has declined in the Denver-Aurora-Lakewood metro area. The total number of active property listings for the area declined by 18% over the past year or so.
A separate report showed that the Denver real estate market had a 0.4-month supply of homes for sale as of February 2022. That was one of the lowest supply levels of any major city in the country, for that particular timeframe. And it’s a big reason why homes are selling so quickly.
You don’t have to be an economist to connect the dots here. We have a situation where a larger population (following a decade of growth) has increased the demand for homes. That in turn has sharply reduced inventory levels within the local housing market. This lopsided supply-and-demand situation has led to faster and faster home sales, along with steadily rising prices.
As a result of all this, the Denver housing market could be one of the hottest markets in the nation through 2022 and into 2023.
Major Price Growth, as You Would Expect
Given all of the real estate market trends mentioned above, it’s no surprise to see Denver home prices climbing at a steady pace in 2022. This is another trend that could stretch into 2023, to some degree.
According to the Realtor.com report mentioned above, the median list price for single-family homes in the Denver area rose by nearly 19% over the past year.
The real estate data company Zillow recently reported that the median home value for this market was around $627,000. That marked an increase of more than 20% from a year earlier.
The chart below, provided by Zillow, shows the median house value for this metro area, going back ten years or so. You can see how the appreciation curve grew steeper through 2021 and into 2022.
Forecasts for the Denver housing market extending into 2023 predict that home prices will continue to climb at a steady pace. And that’s only logical, when you have a heavily skewed supply-and-demand situation.
Denver Home Buyers: Be Prepared for Competition
Anyone planning to buy a home in the Denver area during 2022 should be ready to bring their ‘A’ game. With record-low inventory and steady demand from buyers, the Denver housing market will likely remain highly competitive well into 2023.
By some measurements, it could be one of the most competitive real estate scenes in the country. And that’s unlikely to change anytime soon.
Local home buyers should also prepare for a potentially lengthy house-hunting process, where they might encounter multiple offers from other buyers. Expanding your search radius and being flexible with the home’s location, size and features could also increase your chance for success.
The bottom line here is that tight inventory conditions and strong demand will keep Denver in the “seller’s market” category for the foreseeable future.
Disclaimer: Real estate and economic forecasts are the equivalent of an educated guess and should be treated as such. The Home Buying Institute makes no claims or assertions about future housing trends.