2022 Denver Metro Housing Market Tough for Buyers
New Listings Drop to Lowest Since 2016, adding to already Tight Inventory.
Of the 1.4 million households in the Denver Metro area, only 1,477 homes and condos were available for sale at the end of the year, compared to 2,541 at the end of 2020 and 5,037 at the end of 2019, according to latest Market Trends Report from the Denver Metro Association of Realtors.
Going all the way back to 1985, the metro area has averaged around 12,652 homes for sale at the end of December. Last month, buyers only had about a twelfth of that available to them, and 34.3% less homes than were available in November. This already tight lack of supply, combined with strong demand continues to drive record price gains.
The median price of a single-family home sold in metro Denver rose from $502,775 at the end of 2020 to $599,990, a 19.3% increase. The median sales price of condos and townhomes in December was $381,500, up 15.6% from a median price of $330,000 in December 2020.
Buyers closed on 63,684 residential properties last year, only 183 fewer than in 2020. Although the number of sales was flat, higher prices drove the sales volume of transactions up 17%, from $33.3 billion to $39 billion.
The reason for the record low inventory can be found in new listings, which fell 5.3% last year to 66,308. This is the fewest homes put on the market in any year since 2016. And those homes that did hit the market moved quickly, with half going under contract in under four days. Compare that to 2020 when homes spent a median of seven days on the market, and in 2019 when it was 13 days.
Interest rates experienced their largest rise in two decades at the start of 2022, and if that trend is sustained, these rates will reduce affordability for buyers which reduces overall demand.
Given the recent Marshall Fire Tragedy, the Denver housing market looks to remain undersupplied well into the first half of the year but could loosen up in the second half as demand eases. Its likely that Home prices will keep going up, but so will interest rates.