The Denver 100 provides this Annual Real Estate Report as a service to our clientele and friends to give the current trends in the Denver residential real estate market and a resource to predict the future housing direction in our marketplace. In this post, you can find historical data from the 2021 Denver real estate market, along with our predictions for 2022 real estate trends. We pride ourselves on being better informed real estate brokers, and we thank you for your past support and future opportunities to serve your real estate needs.
Greater Denver Metro Area Communities
Arapahoe, Adams, Boulder, Broomfield, Denver, Douglas, Elbert, and Jefferson
62,047 single-family and condominiums sold in 2021 compared to 58,565 sold in 2020, or a 7.3% increase in the number of homes closed.
• At Year-End 2021, there were 1,282 active homes for sale compared to the end of 2020, which had 2,956 homes – a decrease of 57% of inventory over last year this time. This decrease does suggest the sellers in the Denver real estate market are still at an advantage in negotiating their sales as prices are still rising.
• The average price of a home in the Denver Metro Area ending 2021 is $622,740 compared to $541,004 ending 2020, a 15% increase in price for the mix of properties sold. By comparison, 2010 had a single-family average price in Denver of $258,597.
• The average days on the market for 2021 was 18 compared to 24 one year ago.
• The selling price obtained compared to the List price is above 100% for most neighborhoods in Denver.
• What this means is that buyers were willing to pay more than full price to buy a home in 2021.
• The absorption rate for single family homes in the Denver Metro Area with 2021 year-end inventories is a 1 week supply. As the inventory increases the amount of supply increases. This inventory monthly supply will rise during the spring and summer seasons.
• The $500,000 to $750,000 price range had the most detached home sales, with 19,492 homes closed in 2021, creating an absorption rate of 6 days of inventory. Below 6 months of inventory typically indicates prices will continue to increase.
• Conversely, the $1.5 million and above price range had a total of 1586 homes closed in 2021, creating a current absorption rate of 1.05 months of supply. This is a decrease of 62% in supply from 12 months ago. Luxury Home Sales are on Fire in Denver.
Do You Wish You Would Have Bought More Real Estate in 2011?
Don’t wish the same thing in the year 2030!
Watching the inventory will give you a very visual picture of Denver’s future real estate performance. In the last decade, inventory has decreased from 14,156 in December of 2011 to 1282 in December 2021, a dramatic 91% decrease from that date. This has made the Denver real estate market one of the most outperforming markets compared to other national marketplaces. We see inventories growing slightly year over year by as much as 400% in 2022 to an inventory level of approximately 6000 units available at the peak of the spring/summer selling season. However, until the inventory rises above the 15,000 unit level, the demand for housing will remain strong.
Total Number of Homes Closed Increased 53.2% over the last Decade!
In the recent ten years of data, the number of units closed has gone from 40,498 in 2011 to 62.047 in 2021. This increase in closings represents a 53.2% increase in closed units over that period. As the inventory will rise in 2022 and beyond, the number of units closed will decrease slightly over the next 5 years as buyer demand decreases. This growth is unsustainable to continue, even though we expect population increases in Denver for future years. Builders have built out on their past lots, leaving very little standing inventory. We anticipate new home “starts” to continue to rise in Denver. The resale number of units closed indicates the short term will not see very much of a decrease in the number of closed units for 2022. However, due to the lack of current available resale inventory, we see an adjustment of the number of units closed in 2022 to be 6% less than 2021, or approximately 58,324 homes closed for the upcoming year.
Average Price went up 154% Since 2011
A 154% rise in the average price of all properties in Denver for the last decade makes homeowners very happy with their newfound equity position. This wealth growth in housing for Denver is unprecedented and cannot be sustained due to the average buyers’ income that has not kept pace with the property pricing for the 8 county Denver metro area. Homeowners, on average, have more equity today than ever before in Denver. That equity position is causing homeowners to stay in their existing residences vs. making a move within the market. 2022 will find retiring property owners selling and taking advantage of the growth of their assets and making a move to less expensive markets. Most homeowners move towards the locations of their families. Since many property owners in Denver moved to the Colorado market for opportunities, they are often displaced from their core family location. Equity in homes gives the flexibility to consider a move.
Average Price of Single Family Detached Homes
123% Increase Since 2011
Average Price of Attached Homes
179% Increase in 10 Years
2022 Housing Market Projections
For The Greater Denver Metropolitan are including counties Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Elbert, and Jefferson
- The Inventory is at its lowest level in Denver real estate in recorded history. To suggest that Inventory will rise is not much of a risk in predicting. Still, as the 2022 year goes on, we would anticipate inventory levels to go to approximately 6000 to 7000 available units in the selling season of spring and summer.
- Today’s home prices are at record highs. There will be continued gains in prices for the first 3-6 months of 2022. However, as prices rise and interest rates rise, there will be a much slower pace of price increases in 2022. We would predict a 3-5% appreciation of the rise of homes for the whole year.
- In the Denver real estate market, sales will decrease slightly for 2022, with total closed sales to be approximately 58,000 single-family and condos sold for the upcoming year. The last half of 2021 experienced the start of closed units being lower per month, year over year. This decrease is primarily a result of fewer homes on the market, but the buyers are also getting squeezed out of the market. Prices of homes and the start of interest rates rising above 2021 levels will continue to reduce the number of buyers who can buy in the Denver real estate climate.
- The Luxury Market is stable, and in the new luxury home market, the product price increases faster than the resale homes. Buyer behavior has changed as to what the buyers utilize in a luxury home, and the buyers are more interested in convenience than mega-mansion size. Luxury Home Builders will run out of land before they run out of buyers in 2022.
- The First Time Home Buyer Pool will increase in 2022 and make-up 40% of the entire market for Denver; as Millenniums find stability in jobs, relationships and reduce personal debt, they will be the purchasers of homes in 2022 at a greater level than 2021.
Thank you for allowing The Denver 100 to be your resource for the Denver Housing Market. We are grateful for the opportunity to serve your real estate needs in 2022.