The housing market throughout Denver this year continues to experience increased buying demand that’s quickening the sales of homes. It’s one of the most fast-paced housing markets seen during this first quarter.
According to the recently released report by the Denver Metro Association of Realtors (DMAR), home buying speed significantly outran the supply of new listings, and more active listings went under contract despite the rise in home prices.
At such a remarkable speed, the icing out of home buyers is often inevitable.
Closing price review
Single property homes are the most prevalent home types in Metro Denver. Detached apartments in Denver real estate usually command more demand than the attached homes, but this wasn’t the case in February.
The sudden increase in demand for attached homes last month resulted in a 16.29% year-over-year increase in the number of closed attached properties. The average closing price for a standard attached housing unit in February was a historic $401,552.
Despite the 1.8% year-over-year decline in the number of closed detached homes, the Denver housing market had 3,641 closed housing units throughout February. An overall 3.7% increase from a similar time in 2020.
Listings in this housing market generally sold in a median of 5 days, which is ten days faster than a year ago. Properties continued to go over their asking price, resulting in a 101.9%close-price to list-price ratio.
Besides the current tough bidding competition, buyers can still secure their dream home in this market only if they become well informed and creative. You’ll need to have more guts to own a home in Denver in this quarter.
The median closing price for most single-family properties in this market is $530,000. This price marks a 4.1% increase from the previous month and a 21.8% increase from February last year.
Properties similar to townhouses and condominiums aren’t popular in Denver, especially now that everyone is interested in having more space. But due to the stingy shortage in new home supply, the median closing price for this property segment was $337,250 from the report, marking close to a 12.8% increase from a year ago.
Housing market activities and home supply trends
The DMAR report highlights that Denver had an average of 0.55 months of inventory in February. To get the real picture of how thin home supply is in this market, we’ll have to revisit historical housing records for both Denver and its surrounding counties.
13,531 is the average number of active properties for all Februaries since 1985. According to data from U.S. Census Bureau, the Denver housing market has more than 815,000 properties, and records show that new supply has never been this low.
There were 4,507 new listings from January. This figure accounted for a nearly 7% increase from December 2020 and an 11.5% decrease from a year ago. Relative to market activities in January, the 3,641 closed listings in February marked a month-to-month increase of up to 13.4%.
The sudden decrease in the median days throughout Denver clearly indicates how this housing market adjusts to record-low mortgage interest rates and an unusual increase in demand.
Approximately more than 50% of all properties listed in February went under contract within the first week. This frantic pace is in line with most of this year’s projections, and housing real estate experts are cautioning that this could continue through the second quarter before finally receding.
The luxury housing market front
The DMAR report also included a highlight of homes priced above $1 million, otherwise referred to as the luxury housing market. Ever since this market segment picked up speed in late June last year, there are no signs of it slowing down any time soon.
The overall 446 sold properties throughout Denver in this market, the annual number of luxury home sales increased by more than 62% over last month alone.Further analysis reveals that the luxury detached segment accounted for 206 closed homes, marking a month-over-month increase of 10.75% and about 46.10% up from last year.
The luxury market relatively has more listings compared to the single-family market. Buyers are gradually taking advantage of the historic mortgage rates to increase their buying capacity and overall interest for high-end properties.
From the report, this market had an overall 97.63% close-price to list-price ratio, meaning that competition in this front is becoming fiercer as time goes by.
Seasonality, administration of more vaccines, and a rise in mortgage rates are some of the main factors that can help slow down the fast-paced Denver housing market. In the meantime, sellers need to invest more time preparing their houses before listing them for sale, and realtors should become more creative in marketing these listings. For more information and housing help, fill out the contact form or call us at (720) 724-9794.