The U.S. housing market in 2021 has been a year full of low interest rates, eager buyers and low inventory of homes on the market. Denver is no exception, especially as it continues to attract young professionals, growing families and others to its location on the Front Range of the Rocky Mountains.
Ranking No. 14 among the Best Places to Live in the U.S. in 2021-2022, Denver sees high scores for its desirability among U.S. residents and strong job market in particular. But such attractions that draw people to the Mile High City and its surrounding suburbs come at a cost: The more popular Denver gets, the more expensive the housing. And it’s only getting more popular.
To help you navigate the Denver housing market, whether you’re looking to buy a home, sell your current one or find a reasonable rental, we’re breaking down current trends in the Denver area and what experts say is likely in the coming year.
The Denver Market Now
Is It a Buyer’s Market or Seller’s Market in Denver Right Now?
The Denver housing market is currently experiencing a seller’s market, meaning there are more active buyers than there are homes for sale. As a result, sellers benefit from competition among buyers, which means homes often sell for above the asking price and sell quickly.
Denver Home Prices
The median home price for single-family detached homes in the Denver metro area was $600,000 in July, according to the Denver Metro Association of Realtors. Adding in attached properties, the median close price for homes was $540,000.
The median home sale price for single-family detached homes is the same as in June and less than $8,000 above May, though it’s a 20% increase compared to July 2020. Factoring in attached properties as well, the median close price is a slight drop from the month prior, but up 17.39% year over year.
Denver Foreclosure Rate
The Colorado Department of Local Affairs reports that in the first quarter of 2021, the most recent data set available, the entire state of Colorado saw 226 foreclosure filings and 103 sales at auction, which are completed foreclosures. Compared to the first quarter of 2020, foreclosure filings are down more than 83% and completed foreclosures are down more than 66%.
A major factor impacting foreclosures for much of 2020 and into 2021 was the fact that the U.S. Department of Housing & Urban Development instituted a foreclosure moratorium for any federally backed mortgages as a result of the COVID-19 pandemic. That protection expired on July 31, so it’s likely foreclosures will climb in the coming months in the Denver area, the state of Colorado and across the rest of the U.S.
Renting in Denver
At the start of the pandemic in 2020, interest in rentals saw a marked drop in major U.S. cities as people sought lower density and more space to comfortably quarantine and work from home. Denver was no exception, though by late summer 2020 rents were beginning to recover.
A year later, rents have continued to climb in large cities, and in Denver it’s no exception. The median rent in the Denver metro area is $1,866 as of July, a 12.9% increase compared to July 2020, according to realtor.com.
“The recovery this summer mirrors what we’re seeing nationally,” says George Ratiu, senior economist for realtor.com. “From the trough of 2020, we’ve seen all markets see a strong recovery.”
The rentals seeing the most interest also tell a typical pandemic tale — larger rentals are rising in price faster than smaller units. Two-bedroom units had a median rent of $2,175 in July, an increase of more than 15% year over year, while studio apartments had a median rent of $1,548 in July, just a 9% increase year over year, according to realtor.com data.
Homebuilding in Denver
Homebuilding in the Denver metro area is a much-needed aspect of the local housing market. While people moving to the area has slowed over the years, population growth has continuously led to increasing demand on housing and pressure for additional housing options. Between 2015 and 2019, the Denver metro area increased in population by 3.88% due to net migration alone, according to the U.S. Census Bureau.
“The Denver area has been on a rapid growth trajectory ever since the Great Recession ended, and that has created a counterintuitive dynamic where everyone seems to agree on the need for more housing, but actually building the housing the community needs is more difficult than ever,” wrote Stephen Myers, chief operating officer of Thrive Home Building, a local homebuilder in the Denver metro area focused on health and energy efficiency, in an email. “Residents are sensitive to the issues that growth brings, like noise, traffic and density impacts, while local governments are looking to new development to achieve policy goals like affordability and sustainability that their current housing stock isn’t providing.”
What to Expect From the Denver Housing Market in late 2021 and 2022
Eager to know what you can expect for the rest of 2021 and into 2022? Here’s a breakdown of the housing forecast for homebuying, renting and construction.
Like much of the rest of the U.S., the Denver homebuying market has endured extremely low inventory, but there are signs that things are beginning to turn around. “We’re beginning to see new listings actually turn positive,” Ratiu says. The added inventory helps to ease demand and slow the growth of home prices to more sustainable levels.
As a result, Ratiu predicts that over the next six to eight months, the Denver housing market may see a return to more typical seasonal trends than the area has seen since prior to the start of the pandemic. “There’s hope on the horizon based on the data we’re seeing,” he says.
Rents in the Denver area are likely to continue upward, with high demand for larger spaces with plenty of room for work-from-home setups. For renters who have been strapped for cash throughout the pandemic, the added stress of rising rental rates could add to the uncertainty attached to the end of federal eviction protections.
When the eviction moratorium issued by the U.S. Centers for Disease Control and Prevention initially expired on July 31, Colorado Gov. Jared Polis announced statewide protections for tenants waiting on emergency rental assistance for an additional 30 days. That has since expired, and the additional CDC eviction moratorium targeting areas of high COVID-19 transmission issued on Aug. 3 was struck down by the Supreme Court. As a result, Denver area tenants worried about making their rent on time must appeal to their local government for assistance.
For city residents, the Denver Department of Housing Stability offers eviction legal assistance, as well as options for rent and utility payment assistance. Information on applying for rental assistance, legal help and additional eviction or foreclosure resources are available on the Denver government’s website.
If all goes well, new construction has the ability to further ease demand for both homebuyers and renters in the coming months and year. In July, permits were approved for 2,181 private housing structures, which included both single-family homes and properties with more than one unit, according to the U.S. Census Bureau.
The promise of new housing, however, depends on availability and cost of materials as the COVID-19 pandemic continues.
“Issues in our supply chain continue to affect both the price and availability of building materials,” Myers says. “We’re hoping to see some improvement during the rest of this year, but it’s really anyone’s guess how long it will take for these issues to work themselves out. If we find ourselves in another year of strong housing demand in 2022, we could be dealing with these problems for a while.”
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Denver Real Estate Housing Market Forecasts and Trends 2021-2022 originally appeared on usnews.com