The real estate industry was predicting this spring season would be calmer than 2021, where more than 70% of properties for sale experience multiple offers or even bidding wars. Unfortunately for would-be homebuyers, that conventional wisdom has taken a turn. The Spring 2022 market is set to be one of the hottest – and most competitive – ever. The main reason for this is low inventory combined with rising mortgage rates. In the long run, higher mortgage rates could slow down the housing market as some buyers get priced out of the market. However, for the short-term, buyers are still on the hunt, trying to dive into the market and land a home before the rates rise too much. What does this mean for Colorado cities like Denver? We break it down below!
Denver is a dream for sellers, but buyers will continue to face challenges. Denver currently ranks above New York City and Boston in terms of median list price and affordability. How is affordability determined? The affordability survey looks at the ratio of the median home sold price to median household incomes. The current ratio for the Denver market is 5.67, with a median home price of $540,000.
As many markets across the U.S. are still dealing with a lack of inventory, Denver is no exception. This lack of inventory has strongly influenced price appreciation to the Denver market, and Colorado as a whole. The Denver Post reported that Colorado was the 5th most competitive market in the U.S., with 58.4% of properties selling above asking price in February alone.
Just how competitive? To put it into perspective, at the beginning of 2022, Denver had just over 1,400 properties on the market. In comparison, the normal amount of inventory, or before the housing surge, for Denver was over 14,000! With such a low inventory continuing into the Spring season, price appreciation could go into the double -digits. Homes in Denver are selling at rapid pace, too. Compared to January of last year, where homes were selling in about 3 weeks, homes are now selling in just over 1 week on the market!
Many homes get multiple offers, some with waived contingencies.
The average home close price is up 9.02% in March month-over-month and the average days on the MLS was around 11 days. Hot homes can sell for about 7% above list price and go pending in around 3 days.