Prices are beginning to stabilize, but remain unaffordable for many
The average close price for detached (freestanding, single-unit building) residential homes in the Metro Denver area reached a record high of $725,278 in June, according to a Denver Metro Association of Realtors (DMAR) market trends report. The average dropped to $699,795 in July, and the total inventory of detached and attached (residential unit in a building with other units—such as a townhome or apartment) increased from 3,122 active listings in June to 4,056 in July.
This balancing of supply against extreme demand may indicate the beginning of a rebound for the buyer’s market, or at least a levelling off of prices; however, the situation continues to look bleak for buyers. Particularly, as prices continue to rise year to year, for those with lower budgets—the average close price for all residential properties was $506,982 in 2020 vs. $488,545 in 2019.
Though the average close price on properties has decreased slightly, the median close price for detached homes has remained at a peak of $600,000 since June, and the median close price for attached properties has increased from $378,250 in June to $381,250 in July. (DMAR).
Active inventory has increased slightly; however, the number of new listings that entered the market in July is lower in all price ranges and home type categories.
For properties between $300,000 and $499,999, there were 2,546 new listings—down from 2,719 in July. The number of new listings in this price range this year to date is 16,188—significantly lower than the total amount at this time in prior years: The total was 19,822 in 2020 and 22,113 in 2019.
Meanwhile, the number of new listings in the luxury market (properties sold at $1 million or more) has been climbing year to year; year to date new listings at this price was 3,549 this year, vs. 2,102 in 2017.
The rental market has been just as hot. Properties in Denver neighborhoods listed on Zillow below $1,000 per bedroom will have multiple contacts and sometimes multiple applications within hours of going on the market. “The median rental price hit a new high of $1,575 in June, up 8.1 percent compared to last year,” according to the DMAR market trends report.
The affordable housing crisis pervades beyond the borders of the Denver Metro Area as well. Prices in Colorado mountain towns have been driven up by tourists purchasing expensive vacation homes, and service workers in these locations are unable to afford the high cost of living. Crested Butte recently made national news when, in July, they decided to suspend marketing efforts to attract tourists due to a labor shortage (NPR).
The 2020 census counted 5,773,714 in the state as a whole—up almost 15 percent from 2010. Developers have been struggling to keep up with the high demand. One CU Denver student from Aurora, Kylee, told the Sentry, “They keep expanding the neighborhoods here to the point (that), two years ago, they had to build a whole new elementary and middle school at the same time because the schools were so incredibly overcrowded.”
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