This past year, the Denver market has been in flux. However, in the past month or so, we have seen headlines foreshadowing doom and gloom. These headlines, although scary, don’t predict the true nature of Denver’s market.
While pending home sales are down almost 3% from last year, it is far from a crash. Instead, we are seeing the market cool down after a few years of the pandemic. Prices and interest rates are higher, meaning more people are holding off on leaping into home ownership. But still, demand remains high for good homes priced correctly.
Since the start of the pandemic, the perfect storm of circumstances has sent home prices soaring. Record-low mortgage rates and the ability to work from home have spurred Americans to move, country-wide, and the Denver Metro has been no different. Now, even as we’re seeing interest rates begin an upward trend, housing inventory is at record lows, driving prices even higher.
2021 was an insane year filled with some of the most vicious bidding wars in Denver’s history. More homes were purchased in 2021 than in any previous year (63,684). It was far from uncommon to have buyers offering large sums over asking price in an attempt to seal the deal. In fact, at Hatch alone, we saw an offer come in at over 30% over asking on one of our listings! The buyer frenzy last year was driven by many factors, including historically low mortgage rates, and newly acquired locational freedoms brought about by COVID work-from-home policies. Yet another factor was buyer demand outpacing supply by a huge margin not likely to self-correct anytime soon.
So the big question as we head into 2022 is: Are buyers looking at a repeat of last year in the Denver housing market?