The last half of 2020 and the beginning of 2021 are historical for residential home sales in the Denver metro area. A combination of a low supply of houses for sale, low interest rates, and a Coronavirus desire to live in mountain homes has propelled the prices of homes to record highs.
The paradox of this historical rise in prices is that there are relatively few home sales. It seems fewer local homeowners want to sell. That is a big problem for prospective Denver home buyers. And contrary to the past, many of the homes are for owner occupied purposes, not rental.
Long time area real estate brokers have noticed the frenzy in the market that reminds them of the sub-prime meltdown from 2007 to 2010. However, this time it is different. The “funny money” is not part of the process in 2020 and 2021. That is, home buyers have to come up with cash or legitimately qualify for a mortgage loan. In the sub-prime era all the home buyers had to do was fudge a few facts and be breathing at the closing table to buy a house.
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Many brokers have noticed a “fear factor” in the market. That is, people want to leave the denser urban areas of Denver and live in the “open” mountain country. They feel safer and somewhat protected from the Coronavirus. However there is also a large influx of home buyers from Texas, California, and Florida. Many of these buyers are buying larger homes that they can work from.
The statistics can be eye-popping. Some of the surrounding counties such as Pitkin, Eagle, and Routt have seen late 2020 price increase from 122% to 458% from a year earlier.
The residential price increases in metro Denver have been more modest. In late 2020 the price appreciation was 21% from a year earlier.
One real estate broker in Aspen has called 2020 “the great COVID migration.” Record prices are being recorded for the sales of homes in and around Aspen. Another broker said that the residential market could easily sell five times the current inventory.