Double-Digit Housing Price Increases Tied to Supply Imbalance in Denver
"Metro Denver’s worsening imbalance between supply and demand has 2021 starting out with annual home price appreciation solidly into double-digit territory," reports
Aldo Svaldi, sharing data from a Market Trends Report published recently by the Denver Metro Association of Realtors.
"The average price of a single-family home that closed in January in metro Denver rose 2.9% from December to a record $629,159," Svaldi writes. That kind of monthly appreciation added up over the course of the year. "Annual price appreciation is running a hot 18.7%," adds Svaldi.
The sharp increase is caused by an overwhelming share of home sales occurring at the upper end of the market, according to the report. "For example, there were 70% more homes worth $1 million or more sold last month compared to January 2020, while there were 45.4% fewer homes sold in the $300,000 range and an 11.2% drop in homes sold in the $400,000 range."
All that data is also influenced by record low levels of inventory on the market. "After reaching an all-time low at the end of December, the number of active listings dipped another 8.9% in January to 2,316. Buyers last month had less than half as many properties to choose from as they did in January 2020 and compared to the average inventory going back to 1985, 83% fewer options available," according to Svaldi.