Metro Denver 2021 Midyear Reflections
July 16, 2021 | CHR WEEKLY
The first 6 months of Denver real estate was nothing short of chaotic. The year over year average home sold price was up by as much as $150,000 and the number of people looking for homes blasted through previous records. Weekly home showings topped over 40,000 showings in a week, on a record low inventory of just 2,200 homes available for sale.
While this supply and demand imbalance created tremendous wealth through real estate value appreciation for homeowners, it was a challenging time for buyers and sellers having to operate at a frenetic pace.
Depending on the price range, buyers had to scramble to see properties within hours of the home hitting the market and in some cases compete against dozens of offers on the property. Sellers had to vacate their homes for the first weekend on the market to allow the feeding frenzy to begin. And many sellers were hesitant to put their home on the market, knowing they would have to turn right around and become a buyer.
It wasn’t healthy. Not for the market, not for anyone involved in the transaction.
While inventory is still low, we are finally seeing a modest uptick. This isn’t due to some massive increase in homes available for sale, this is a normalizing of buyer activity. We want to underscore, normalizing. Not a catastrophic event or precipitous fall, just an adjustment that might be reflective of how a lot of society is feeling, trying to get back to “normal.”
After the crazy buyer activity over the first half of the year, buyer activity has started to slow down. Again, approaching normal seasonal levels.
Home prices appear to have stabilized over the last 10-15 weeks, leveling off at new highs. And now we may be seeing the leading edge of a positive and healthy trend, a slight decline in the average sold price of a Denver home (while not yet statistically significant as a trend). NOTE: the average sold price of a Denver property begins to decline slightly in July of EVER YEAR, except 2020.
Most likely we will see headlines that claim the sky is falling. Prices are declining and it’s the beginning of the end. The bubble is finally bursting for Denver real estate.
Yes, we expect to see some market normalization which is a slowing in the number of showings, increase in inventory and slight decline in the average sold price of a Denver home. Exactly what happens every year. This is a good sign for a potential return to normal.
Denver is a special place and that drives population. Population drives demand further fueled by a mostly recovered economy, low interest rates and a strong jobs market. Long term prospects for the Denver real estate market remain as strong as ever.
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