Q1 2021 Denver Metro Market Update

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Q1 2021 is setting records. High demand, low inventory, historic low interest rates, a search for space and changing work patters are helping to push prices higher. The average price of a home in Denver   Metro is up 6% year to date. For reference, the average appreciation each year since 2012 is very close to 9%. 

Most of the talk in real estate is about the shortage of inventory. Today there are 3,780 residential homes for sale in our market. Last year at this time we had 17,602. However most news stories are ignoring that in Q1 2021 19,439 homes sold, which is 113 more than Q1 2020. The biggest change in our market is how quickly homes are selling. Q1 2021 had a median time on market of 5 days, Q1 2020 had a median time on market of 18 days. Homes are selling 73% faster this year!

This market will not quickly resolve itself. We have over a decade of under-building being met with an increasing population. I think the prospect that prices will one day be lower than today is unlikely. At some point the boom will fade but we expect prices to stabilize at a much higher level than Q1 2021. 

To reach a balanced market the supply must increase. Demand falling is of little consequence when supply remains close to all-time lows. Supply could come to us from easing COVID 19 restrictions promoting more people to list their homes. The new home construction workforce is maxed out right now and slow moving due to disrupted supply chains.