From October to November, the market saw a staggering 33.41 percent decrease in month-end active inventory, dropping to 2,248. Throughout the entire Denver Metro area, there are currently only 1,444 single-family detached properties and 804 attached properties to buy.
Over the past five years, month-end active inventory dropped between 23.36 percent in 2016 and 27.92 percent in 2019. Theoretically, if inventory stayed the course and dropped 25 percent this year, the market would end the year at 1,686 active properties leading into 2022, which is drastically lower than the end of 2020 and would lead to the most competitive year yet. With 2,248 active listings on the market and that number expected to go down by the end of the month, expectations are set that 2022 will be a wild and competitive ride.
Despite high competition on the horizon, people continue to buy and sell relentlessly. Year-to-date, there have been more houses purchased than in any of the previous five years with the median sales price for single-family and attached properties setting records at $525,000.
“At the beginning of 2021, there were conversations about what type of responsibility we, as Realtors®, have to our clients,” commented Andrew Abrams, Chair of the DMAR Market Trends Committee and Metro Denver Realtor®. “How far from the comps are we willing to stray with the hope that the market will keep appreciating and our clients will be sitting in equity in a short amount of time? At the beginning of the year, offers six figures over asking price were common. That need subsided by the end of June and we see that it has been less common ever since.”
While it may be common for buyers to take their foot off the gas and enjoy December festivities, this is the year to put the pedal to the metal in trying to find a property. Interest rates are low, and looking while others are not gives one a competitive advantage, which in this current market is a must.
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 has more buyers ready to spend $1 million or more on their home today than any other time on record, with prices higher than ever as well. November 2021 was more of the same record-breaking trends with lowest inventory, lowest days in MLS, highest sales volume and highest average prices. In the pandemic world of the “new normal,” this is it for Denver’s Luxury Market.
Last month, inflation drove up the prices for Denver real estate. The sales volume in the Luxury Market is the highest the market has seen in the last five years, up a staggering 69.17 percent from last year alone. When breaking it down to the attached market, luxury sales are up a whopping 145.84 percent year-over-year, likely due to the lack of interest in attached living in 2020.
“While real estate typically sees the Luxury Market take a break as people celebrate the holidays and enjoy winter vacations, the low supply of homes are predicted to keep even the highest price points seeing multiple offers,” said Jenny Usaj, DMAR Market Trends Committee member and Metro Denver Realtor®. “Prices will soar as long as we continue on this path of low inventory. Historically, we have never seen a market with this low of inventory, increasing prices, appreciation gains and inflation. The perfect storm we are witnessing may unravel, but when and why is up for debate as we continue to keep an eye on interest rates.”
Based on the numbers today, it will undoubtedly be the most expensive season the Luxury Market has seen to date to buy a home unless a hard shift in interest rates occurs.
