Denver Housing Market January 2021
Denver is starting out the year with record-low inventory. We haven’t ever had less than 3,000 homes for sale in the Denver Metro Area, since we started keeping records in 1985.
Let’s dive into the numbers:
- December 2020 ended with 2,541 homes for sale. Our average for the month is 12,941 and the high was 24,603 in 2007.
- Single-family homes 1,316 – down almost 61% from last year
- Attached (Condo/townhouse) 1,225 – down almost 27% from last year
- Interest rates hit an all-time low on December 24th at 2.66%.
- Purchase applications were up 26% from last year.
- Refinance applications were up 124% from last year.
- In November new housing permits hit 137,000 which is about 9% the highest permit issuance since September 2006.
- The average increase in value in the metro area is 13.47
- Single-family home is 17.06%
- Condo/townhouse 4.81%
This is such an important graph to see when looking at inventory over the past 10+ years. Notice we started closing more homes than listing them in July of 2020.
I thought these stats were particularly interesting:
For every 1 person leaving Colorado there are 1.75 people moving in to Colorado.
One third of all the homes listed were priced over $1M.
The historical average decrease in active homes for sale from November to December is 14.49%. This year we had 25.59% and we could feel it. COVID was predicted to be the highest rate of transmission and deaths, people stayed home, they weren’t traveling for the holidays, and decided this was not their time to sell.
Homebuyers are bringing more money for their down payment than ever before. Down payments increased by almost 67% more than what people were putting down in 2019.
What is going to happen to the Denver housing market in 2021?
It is always great to sell where there isn’t any inventory. What is essential is to have an experienced agent, like me, who knows how to navigate what is happening in the market at the given moment you are thinking of selling. Only putting a house or property in the MLS right now is not acceptable to get you the highest price possible. This is no time to make mistakes. You need to be represented by a real estate agent who knows how to negotiate and who knows how to market on social media.
There are a lot of people pretending to be investors or homebuyers who will take advantage of you or your parents. You need to pay attention. We are in extreme times, where experience and trust matters.
In previous years, we could sort of predict what was going to happen based on last year, but we have a few influences that we have never seen before. First is the pandemic and second, we are continuing political unrest.
I do know for sure that when we have low inventory, prices go up. Not only do we have extremely low inventory, but we also have extremely low interest rates. Making it more affordable for first and second- and third-time homebuyers, not to mention to be able to afford a second and third home, making the demand is extremely high.
When are we going to have a crash in the Denver Housing market soon?
The question of a crash continues, but if people are bringing a lot of money for their down payment and inventory remains low, we will see increasing prices. The crash 10 years ago happened because people did not have equity and any down payment money and we had a record high inventory. We are not going to see the same thing unless we saw a sudden flood of inventory and everyone took all their money out of their homes. I do not foresee a Denver housing market crisis in 2021.
Want to talk about your personal situation? I’m happy to listen, and if you need I will offer some potential solutions.