While no all-time records were broken this October, just about every October record was broken. This October featured the least amount of listings, the highest average close price, and the lowest days on the market of any October on record. This is just one sign that while seasonality is certainly a factor, competition for homes in Denver is still high.
Homebuyers can use this seasonality to their advantage. While this likely won’t mean lower-priced homes, it will often mean less competition on these homes. Average home prices stayed steady from September to October, dipping less than 1%. We are still seeing desirable homes receive multiple offers, but fewer offers than we saw in the spring and summer. We are also seeing homes stay on the market for an extra day or two, giving buyers time to make a decision. With only 3,376 homes for sale, demand still greatly outweighs supply and the average property is still closing above the asking price at an average of 101.82% of the list price.
An important thing to note as we compare home prices in Denver is that attached properties have never appreciated at the same rate as detached homes. It is also important to consider that “attached properties” includes both duplexes with yards and garages, as well as high-rise condos. Covid has many buyers that were once open to a condo, restricting their searches to only include places with private outdoor space. This creates a great opportunity for buyers that are willing to consider properties with shared or rooftop outdoor space. It’s important to keep in mind that when you see that home values are up 17% in Denver this year, it doesn’t mean that all properties are appreciating the same.
After rental rates dipped in 2020, we are finally seeing the effects of the thriving real estate market on rentals. ApartmentList reported that Denver rents are up 16.6% year to date and vacancy rates are below 4%. These numbers indicate that while the real estate market is competitive, people will no longer be able to find reprieve in the rental market.
Interest rates are already rising from the record lows of the spring and summer. We don’t expect these raising rates to cause prices to fall because of the lack of inventory in Denver. Appreciation will likely stabilize, but there are no historical indicators to suggest that homes in Denver will lose value.
With rental rates and interest rates on the rise, we feel confident that if you are waiting for a better time to buy a home, it will not come in the near future. While sometimes this seller’s market seems intimidating, take solace in the fact that more homes have sold year to date in 2021 than any of the last 5 previous years.