Metro Denver Real Estate Market hits all time low inventory but ironically, this might be the best time for buyers to purchase a home for a while.
Although inventory hit a new record low, demand is typically lower this time of year and prices will start to rapidly rise as more buyers come to market in the spring. Read on to see how the current market numbers help to forecast if the winter will be a good time to buy or sell and what I expect to happen to the market next spring.
NOTE: Statistics are taken from Greater Denver Metro Counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park
The best way to read this post: The majority of this post is comprised of me analyzing different metrics to break down what is happening with price, supply and demand across different segments of the Metro Denver real estate market. This helps me determine where the real estate market has been, where it is now and forecast where it is likely to be in the near future. If you are a stats nerd like me, you might enjoy reading the entire post, if not - skip to the summary at the end of each section, or all the way down to the overall Denver real estate market review and Denver real estate forecast at the end of the post. If you are reading this post on a cell phone, turn your device sideways to see the graphs in their entirety.
Metro Denver Real Estate Statistics Snapshot - All Property Types
| Latest Month November 2021 | Previous Month October 2021 | Year Over Year November 2020 | |
|---|---|---|---|
| Median Sold Price | $545,000 | $538,000 | $465,000 |
| # of Active Listings | 2,524 | 4,208 | 6,135 |
| # Under Contract | 4,938 | 6,043 | 4,753 |
| # Sold Homes | 5,572 | 5,898 | 5,643 |
| Months Supply of Homes | 0.4 | 0.7 | 1.1 |
| Median Days on Market | 5 | 5 | 6 |
Metro Denver Real EState Prices
Median Closed Price For The Entire metro Denver MLS - All Property Subtypes
The median sold price of homes in the Denver metro area rose slightly from last month to $545,000. The lowest prices of the year typically occur either in September or December/January. Prices as a whole are down less than 1% from the peak in June and are up 17% year over year from November 2020.
Median Closed Price - Single Family Homes
The median sold price of single family detached homes (houses) rose 2% in November and almost 18% year over year.
Median Closed Price - Attached (townhomes and Condo)
The median sold price for condos and townhomes in Metro Denver reached a new record high of $350,000. Attached homes do not have as much of a pronounced cycle as houses. Prices for condo and townhomes rose nearly 4.5% last month and 17% Year over year.
Pricing Summary
Prices rose for all property types in November (typically one of our low months).
Metro Denver Real Estate Supply
New Listings - Metro Denver, All Subtypes
3,965 homes were listed in November which is typical for this time of year.
Homes For Sale - Metro Denver, All Subtypes
A new record low in inventory at only 2,524 units available for sale. Our inventory is 59% lower than this time last year and 76% lower than November 2019.
Supply Summary
Supply is the lowest it has been since record keeping began. This is because our inventory has not recovered from the COVID fallout in the spring of 2020 coupled with higher demand. Builders cannot bridge the gap due to worker, material, and permit shortages.
Metro Denver Home Buyer Demand
Sold Homes - Metro Denver, All Subtypes
5,572 homes sold in November. This number is similar to the number of homes sold in November last year; however, about 20% higher than Novembers before COVID. December and January should see more of a decline before sales begin the spring climb February through June.
Pending Sales - Metro Denver, All Subtypes
The pending homes sales metric is the best indicator of our current market because it is our most recent metric and tells us how many homes went under contract during the month of November, while closed sales and sold prices in November show the results of homes that went under contract months ago in October and late September.
During the month of November, 4,938 homes went under contract. While this is a decrease, it is still almost 25% higher than a normal November.
Demand Summary
Demand is about 23% higher than typical for this time year. Demand will continue slowing through January, but I anticipate it will still be higher than normal.
Interest Rates
According to Bankrate.com’s Rate Trade Index, “Mortgage experts are split over where rates are headed in the coming week (Dec. 2-8). In response to Bankrate’s weekly poll, 44 percent said rates will go down. Meanwhile, 33 percent said they would hold steady and 22 percent predicted they would rise.”
Today’s Most Prevalent National Rates as reported by Bankrate.com.
- 30 YEAR FIXED – 3.22%
- 15 YEAR FIXED – 2.54%
- 5 YEAR ARMS – 2.74%.
Denver real estate Forecast and market review
Pricing – Overall, all segments of homes throughout the metro Denver area rose last month and have increased 17% year over year.
Supply – Our inventory it a new record low, it is 59% lower than this time last year and 76% lower than November 2019
Demand – Demand is dropping due to our cyclical market, but still 23% higher than typical for this time of year.
What’s Next for the Denver Real Estate Market? – My Denver Real Estate Market Forecast: – I don’t expect prices to get much lower than they are now. I think we will see slight increases or decreases through January and then prices will begin to rise again. I see a scenario where next spring/summer could be as crazy if not crazier than this year was. Buyer demand (pending listings) is up, new listings are at about the same levels as last year; however, inventory is almost 60% lower than it was this time last year. If there are a large number of sellers who sat out last year and are waiting for spring, then inventory could stabilize and return the market to normal.
My Advice for Potential Sellers – If you are ready to sell now, prices are where they were during the spring peak, and you will still get a great price for your home in a short amount of time. If you can wait until March or April, prices might be higher. The gamble to waiting is if demand will stay unusually high, interest rates will stay low, and if there are a large number of sellers who have been holding off selling until spring.
My Advice for Buyers – Now through the end of December is probably your best opportunity to find a deal before prices begin another seasonal climb. Buyers still need to be competitive, but terms are more reasonable than they were this spring. I don’t see prices increasing at the rate they did last year, but buyers who purchased in December or January saved nearly 20% to those who purchased in May and June.
Is a Wave of Foreclosures on the Horizon? – Maybe, but it will not have much of an effect on our market if it does come. Unlike in 2008, most homeowners in the Denver area have equity in their homes today. When the moratorium for foreclosures is lifted, these homeowners can either modify their loans or sell their homes at a profit rather than letting them fall into foreclosure. The homes that do go into foreclosure will likely be bought at auction rather than falling to the banks for REO or bank owned sales.
