While 2020 was considerably a down-year for most markets, it wasn’t the case for Denver real estate. Following the initial lockdown in March and April during the early stages of the pandemic, the market actually rebounded almost immediately and continued to appreciate strongly, at times even by double digits.
Over four months into 2021 and the momentum continues, with the average price for single-family detached homes in the Denver Metro reaching as much as $674,990 in March. The median price for properties in the city, on the other hand, was up 15% year-on-year and 5.66% month-on-month at an estimated $560,000.
According to a recent report released by the Denver Metro Association of Realtors (DMAR), detached homes in Denver also saw a 27% increase in closed sales, although attached homes also saw an 11.62% decrease in closings in February.
Denver’s real estate supply will remain modest
As of April, the Zillow Buyer-Seller Index (BSI) has shown that Denver remains a seller’s market, or one where demand for property continues to exceed the supply. This has given sellers an advantage over buyers in price negotiations in the past year, as the values of homes for sale in Denver, CO has gone up 7.8% in the past 12 months.
Unfortunately, property owners have not been as excited about selling as house hunters are about buying during this pandemic. Overall, the residential real estate market has seen a massive drop in active listings, tallying only 2,024 at the end of February–a 58.14% decrease compared to the same month last year.
Real estate experts and analysts expect demand to continue to outweigh supply even when listings go back up, with the DMAR even going as far as recommending that buyers be prepared to pay as much as 20% over the list price of a home if they really want to buy because supply is simply that scarce.
And the city’s rental market will continue to thrive
Denver continues to have a comparably higher cost of living than most other Colorado cities and, combined with the previously mentioned low housing supply, continues to see a rapid rise in its rental market.
As property prices increase much faster than wages, and Denver’s large student population simply continues to insist on renting rather than owning, there will continue to be a constant stream of people who will opt to rent in the city and essentially be providing steady income to investors willing to buy property for the sake of renting it out.
Granted, the ongoing pandemic has slightly changed renter behavior and expectations. However, as more of the population gets vaccinated, it can be expected that many potential tenants will renew their interest in living in the city. According to Apartment List’s March 2021 report, an uptick in demand is already evident, as the average rent in Denver increased by 0.9% between January and February.
It depends on which end you are on
Benefitting from the Denver real estate market in 2021 will greatly depend on what side of the property transaction you are on. If you happen to be a homeowner intent on making money off of your property, you are definitely in luck, as the demand in both homes for sale and for rent remains high in the city.
On the other hand, if you are a buyer, you can expect to spend a major amount of money on your property purchase, with the silver lining that you’ll likely grow your investment as a result of the appreciation most of the Denver real estate market continues to experience.
Whether you are buying or selling, or renting or leasing, allow us at Noel and Martinez Team to address any concerns you have. Contact us and we are more than willing to provide you service that is backed by decades of experience in Colorado real estate.
