The 2021 Denver real estate market promises to be great for home sellers, brokers and even buyers. The biggest source of long-term demand in the market continues to be demographics. In addition, the short term spike in demand is driven by the current low mortgage interest rates.
Millennials Help Drive 2021 Denver Real Estate Market
Over the next six years, the youngest of the millennials will be entering their first home purchase while the older half will focus on their first move-up purchase. As a result, the entire 15-year generation somewhere within their peak buying years. We deal with that everyday. Because, 35% of our real estate business comes from that generation.
In 2020, the demand for housing spiked to new records in most parts of the country as lock downs, due to the pandemic, eased in early June. In addition, the low interest rates of the past seven months have turbo-charged the demand for homes in the 2021 Denver real estate market.
This spike in demand is driven by some of the lowest interest rates in history. And, that is expected to subside a bit when interest rates rise somewhere above the 4% level. My crystal ball is a little foggy so I can’t say exactly when that may happen!One of the unexpected developments in the market in 2020 was the high demand for homes in the Denver luxury real estate market. Those homes are defined as a price tag of $1 million and higher. In the Denver metro area, the inventory of homes in this price range stood at 2,000 as of July 2019.
But, by January of 2020 it had dropped to 1,500 homes and currently sits at just 750 available homes between $1M and $3M. If you would like more detailed information on this price point in a specific area, please use the form below to request the full report.
National Real Estate Statistics for 2020 Vs Denver
- U.S. home sales increased by 26.6% – Denver up 25.6%
- National inventory dropped by 36% – Denver down by 58%
- Nationwide home prices rose by 12.3% – Denver up 16%
- Average U.S, sale price was $350k – Denver home price was $552k
What Might We Expect Ten Years From Now?
Since the 1930’s, Denver has outpaced the national population growth rate. And, it does not appear we will be ending that trend any time soon. Because, our population in metro Denver is projected to add another 700,000 people in the next ten years! At Denver’s historic annual home appreciation rate of 5.5%, that’s an average home price of $942,000 ten years from now! As impossible as this seems, we only have to look at Southern California’s home prices where the average home sells for $800,000 currently.
Historically, Denver will match Southern California’s average home price within 10 to 12 years. So, high demand for homes and low supply will continue to be a part of our Denver market for many years to come. This scenario does not lend itself to a market bubble in Denver real estate. I suspect if you invest in a primary residence or an investment property now, you will make a very nice profit on either over the next ten years. Many of the nation’s leading economists agree with this more than positive opinion of the future of real estate values.
THE KIDS ARE GONE – TIME TO ADJUST WHERE WE LIVE!
If this is where you find yourself in the 2021 Denver real estate market, we can help! Whether you are considering a move to an existing property or a new build, attached or detached living, we know the locations! So, please contact us early in your thought process to maximize options and minimize costs. Just use this form and we can talk!