Denver Home Price New Record Bidding Wars March 2022 Update
Denver is not expected to see record home prices during the winter months. Spring and summer tend to be warmer seasons, both in terms of temperature and sales.
But according to the month of March report from Denver Metro Association of Realtorsthe metro area real estate market once again defied expectations, with the average price of a single-detached home landing at just under $740,000, topping the former mark by more than $10,000.
Demand continues to outstrip supply on the local scene, as it has for over a year. The number of new listings for single-family homes and single-family homes active at the end of February, the most recent month for which statistics are available, is actually up from January — 853 from 788. But that’s still a drop 23.74% year-over-year. . And while bumps were seen from January through February in new listings (from 2,376 to 2,910) and closed properties (2,015 to 2,141), those numbers are extraordinarily low when considered historically.
A graph in the report, which spans from January 2008 to January 2022, puts the various factors into perspective. The yellow line is listings that were active at the end of each month, while the blue line shows sales that closed in the same time periods:
The average cost of a single-family home in Denver topped $700,000 for the first time in May 2021, en route to a record high of $728,385 in June. This was followed by a dip to a slightly lower plateau over the next four months: $687,176 in July, $685,832 in August, $688,629 in September and $684,700 in October.
In November and December, the average broke through the $700,000 barrier again, landing at $703,847 and $704,716, respectively, before dropping to $688,127 in January. This decline, however, proved to be short-lived: the February 2022 average of $739,950 is the highest DMAR on record. The median price also increased from $599,000 in January to $635,000 in February.
Why is this happening now? The association characterizes buyer demand as “hyperactive”, and various measures confirm this. The average number of listings on the Multiple Listing Service, or MLS, increased from nineteen days in January to fourteen days in February; median days have also decreased from five to four over the same period. Additionally, the closing price in February was 105.20% of the list, up 2.91% in one month. This translates to thousands of dollars above the asking price required to be overwhelmingly successful in sales.
Andrew Abrams, chair of the DMAR Market Trends Committee, as well as a local real estate agent, points out that there are exceptions to this rule. “Last month I had clients who bought a house $10,000 less than the asking price the same week I had clients who bought a house $250,000 more than the asking price. asked,” he said. “The biggest difference between the two was location and condition.”
Given the realities of today’s market, Abrams suggests that real estate agents should “wear many different hats: therapist, analyst, driver, motivational speaker, and most importantly, educator” because helping their clients understand the environment in advance could help reduce the sticker shock.
But that probably won’t eliminate it entirely. Click to read the Denver Metro Association of Realtors Market Trend Report March 2022.