2021 was an insane year filled with some of the most vicious bidding wars in the Denver housing market’s history. More homes were purchased in 2021 than in any previous year (63,684). Buyers offered 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% above asking on one of our listings! Last year, buyer frenzy was driven by many factors. These included historically low mortgage rates and newly-acquired locational freedoms brought about by COVID work-from-home policies. Buyer demand outpaced supply in the Denver housing market by a 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?

The short answer – Probably. Here are a few reasons why Denver shows all the signs of remaining a strong seller’s market in 2022:
Inventory is still low

As of the beginning of January 2022, there were only 1,477 active properties on the market in the entire Denver Metro area. For comparison, this is 11,175 fewer houses than normal. That’s 41.87% less than there were at the same time last year. The population in Denver is rising faster than the nationwide average. Denver grew 17% in the last 10 years – that’s 420k new residents. Leading the  influx charge are millennials: Denver is the second most popular area amongst millennials (out of the top 100 largest metro areas). As a result, inventory actually hasn’t met housing demand for nearly 10 years, either. We can expect double-digit appreciation again this year. Back-to-back years of double-digit appreciation haven’t been seen since 2015-2016. 

The construction industry is still struggling

Between rising material and labor costs, extreme material shortages, and slow city permitting processes, new build homes are taking much longer to complete. Oftentimes, sacrificing preference in exchange for timeliness becomes the only way to get things done. A buyer asked one of our developers to swap a Thermador range for a Wolff range. We had to tell them “no.” This was because delivery times for the Wolff range were booked out 6-10 months. In fact, some material suppliers are running so low on products that they are starting to only sell to the big builders like Richmond, Lanar, etc. This is being done in effort to protect their relationships with their larger clients. But as a result, it’s causing smaller builders to rethink certain materials being used in their homes.

Changes in Loan Limits

Conforming loan limits have increased to $684,250 in the Denver Metro area. By comparison, that’s $37,050 higher than the nationwide conforming limits. What does this mean? The majority of buyers can now purchase a home up to $750,000 with 10% down without it turning into a massive loan. And while that’s good news for buyers, it’s also likely to perpetuate the upward trend of overall asking prices.

What can a buyer do?
All of this might sound overwhelming if you’re a buyer in the Denver housing market. But rest assured, there are things you can do to sway the odds in your favor:
Start early! Earlier than you ever thought you would.
Work with one of our experienced agents. At Hatch, we understand this market and know all the tricks when it comes to landing you a home.
Don’t get discouraged! We are just as proud of the homes we get for our clients as we are of some of the homes we didn’t get for our clients. We will help you to not get too carried away and make a huge financial mistake. Sometimes just because you CAN get a home doesn’t mean you should. We will make sure to help keep you grounded during your search.
Be patient. Inventory is super low and we are pushing to find you the perfect home through every avenue at our disposal.