The central Denver residential real estate market is beginning to follow pre-pandemic year seasonality patterns – but is different in degree. Here are three graphs that show the market’s evolution..
Lack of inventory has been the primary driver of increasing prices this year. Our record lows of available homes for sale starting December last year were cause for concern that we might not see a typical seasonal rise in June and July. The concern proved unfounded as homes for sale rose in both months but were about 55% less than 2020. February of this year is the record low of homes for sale in Central Denver ever, 132 homes.
With such low inventory and consistent demand for central Denver homes, the average number of days for a home to go under contract plummeted as well. March through July were marked with significant bidding wars over asking price offers.
Low supply and strong demand have driven the median price of central Denver homes up 12.1% year to date. While we are seeing a slight month-to-month increase in available homes for sale, the increase is being outmatched by the demand and prices are continuing to rise, just at a slower rate. From May to June home prices rose a staggering $20,000. That’s a $20,000 rise in median price for a 12-month period, not just the month of July. From June to July prices continued to rise but not as much, $7,500 increase in price.
We expect to see home inventory starting to seasonally decrease. The rate of increase in median prices will slow and may eventually flatten to zero in December and/or January. Days on market will increase ever slightly, and by next spring the market will start rapidly appreciating again.