2020 was a historic year for the 11-county Denver housing market marked by a record low house inventories since March.
According to the Denver Metro Association of Realtors, the Denver housing market kicked off the New Year with 2,541 active for-sale properties. These were the remaining properties after a closed sale of 4,807 properties in December.
Despite thelengthy pandemic and a looming economic turmoil,2020 still managed to score the highest number of home sales than any other previous years. Homebuyers in Denver scooped 62,985 properties off the market in 2020, marking a 6.95 increase in home sales over the past year.
The increase in home demand throughout Denver led to the historicinventory drop of less than 3,000 for all home types. This record-breaking decrease is consequently straining buyers who have to compete in intense bidding wars.
Depending on location, most homes in Denver are still getting between 2 to 20 offers. This intensive competition for housing has forced some to waive their appraisal or inspection rights to secure their dream property in Denver.
Besides the home buying challenges, mortgage rates are still below 3% for the 30 years fixed plan. These low rate reduces mortgage payment burdens and improves buyer’s confidence.
The growing demand for housing in Denver is consequently forcing buyers as soon as new listings appear. At the start of January, properties were spending a median of seven days in the marketplace.
Single-family detached homes reportedly took five days maximum, the least time ever recorded.
Home price overview
Home prices have also been on the increase. The median closing cost for a typical single-family detached property in Denver started at $459,222 in January, shot to $515,000 in October, and slightly dropped to $507,000 on New Year’s Eve.
The median closing price for the attached property market started at $305,000 and rose to $340,000 by the start of 2021.
The pandemic disturbed the usual housing pattern, forcing the market to change its seasonal sequence.Those interested in high-end properties still have several options, unlike the other market segments in Denver.
Nearly a third of the available 1,316 single-family homes were selling at more than $1 million at the start of the year. Since it was the only market segment with more options, the luxury home-recorded a 34.74% increase in home sales from 2019.
Continuous increase in home demands necessitates the need for constant inventory checks. The Colorado Association of Realtors (CAR) concludes in their last report that there still isn’t enough inventory, but there is hope for tremendous improvement as time goes by.
The report recorded at least a 0.8-month supply of properties for sale in November 2020, marking the first time for this market to experience less than a month’s worth of supply. In the subsequent years, the Denver housing market had 1.7-month of inventory and 2-month of home supply in 2019 and 2018.
The market is now full of younger homebuyers who are driving sales off the roof.
A typical single-family attached house measuring 1,247+ square feet with two garages now costs $395,000. $290,000 was their previous price.
Properties with 3-bedrooms and area size of 1,800+ square feet sold at a minimum price of $525,000.
Why is the Denver housing market booming?
Many people moved in 2020 throughout the U.S. Updater analyzed a survey of 1.5 million household moves in the nation, and Denver emerged among the top 5 destinations with the highest inbound growth.
According to the December report by the U.S. Census Bureau, Colorado experienced a population increase of about 50,000 people between July 2019 and July 2020, accounting for both new births and migration.
The state’s population had increased to an average of 760,000 people since 2010, making it the eighth state with the highest population increase across America.
Another study report by the Lending Tree LLC in Charlotte listed Denver real estate among the top housing markets for millennials in America. Denver Metro ranks third in the list after San Jose and Boston.
The report further highlights that more than 59% of all homebuyers in the Denver Area last year were millennials. Further analysis from the report indicates that the median age for home buying in 2020 was 31.25 in Denver.
Based on Lending Tree mortgage applications, the most preferred loan type among all homebuyers in Denver was $354,433, and the average down payment for 2020 was $56,937.