Expect the 2021 Denver real estate market to slow slightly 2021, according to Elliott Eisenberg who headlined the Denver Economic Summit last week. Talking to hundreds of Denver Realtors on-line, the well-known economist also predicted that the overall national economy would likely grow 4% 2021. And, the Fed will not likely begin to raise rates until inflation increases above 2%. Denver currently has the lowest mortgage interest rates in history.
“The problem that Denver faces is the cost of housing. It’s just too expensive”, Eisenberg noted. He expects affordability to limit the 2021 Denver real estate market sales. But, other speakers noted that the small supply of resale homes for sale would offset the housing affordability issue.
For example, building permits for new homes increased last year about 7% and are expected to continue to increase in 2021. That’s because demand from buyers is still expected to be strong this year even with fewer resales homes on the market.
That would be a continuation of the Denver housing boom we’ve seen over the last few years. He pointed out that the economy needs more government stimulus. But, that would likely happen this year. As for interest rates, he said that the Fed is not likely to make any meaningful move to raise rates until inflation begins to exceed 2%. That, he predicts, will not happen anytime soon.
Denver Realtors Hosted Economic Summit
The Summit was hosted by the Denver Metro Association of Realtors last Friday. Realtors need accurate economic forecasts to help their clients and plan their business. So, DMAR hosted this important every year.
DMAR also provides monthly statistics to local real realtors in their Market Trends Reports. That is compiled by volunteer Realtors to better serve the Denver Realtor community
2021 Denver Real Estate Market
How might that affect Denver Colorado? Two local experts spoke to that question at the summit. Patty Silverstein, president had development research partners chief economist at the Metro Denver economic development company, noted that Fort Collins and Greeley have actually have the fastest-growing real estate prices last year. Denver’s prices have also been growing. Denver home prices ranks 13th in the nation. So, affordability is becoming an issue in the 2021 Denver real estate market.
Still Ms. Silverstein believes that the state population growth will continue through 2021 but at a slower pace. Because, Colorado has now recovered about 61% of the jobs lost due to the pandemic. Surprisingly, unemployment in the state was only 4.7% which is substantially lower than most states suffered. So, she expects influx of Denver relocation buyers to continue. They are necessary to fill the job demand here.
Kelly Borough, chief operating officer at the Metro Denver Chamber of Commerce expanded the perspective to the Denver area. Net migration into Denver has been positive since 1990. That’s partially do to the fact the Colorado is the second most educated state in the nation and has six of the 10 healthiest counties.
Colorado is also the number one state for prosperity growth and inclusion by race.
Winners and Losers
All of this is good news for the 2021 Denver real estate market and home sellers this year. However, Brokers are likely to have the biggest challenge to find enough inventory of homes for sale to meet the expected demand. So, expect the number of sales to increase but the prices to continue to bounce upward. Buyers will need a good real estate broker to find available homes as soon as they come onto the market. More importantly, buyers will the counsel of an expert Realtor to carefully craft an offer that might be accepted. Remember, multiple offers on desirable home will continue in 2021.