What Lies Ahead for Our 2021 Denver Market?
Here’s a quick recap of our 2020 market and a look ahead to 2021.
What will 2021 bring to our Denver real estate market? Before we answer that question, let’s do a quick statistical recap of 2020:
We set a record for home sales last year: 62,985. The average home price across the entire year was $525,185. What truly jumps off the page, though, is the number of active listings at the end of the year: 2,541. From 1985 through 2019, the average number of listings active at the end of the year was 12,985.
This spotlights the same trend I’ve been speaking about for the past 12 months—a lack of inventory. There just aren’t very many properties for sale out there. (Granted, we expect this to change in the coming months as the weather warms up.) If we compare December 2020 to December 2019, the decrease in inventory was nearly 50%. This lack of inventory has been making things pretty tough for buyers. The average home price in December of 2020 was $547,461, which meant an annual appreciation rate of 13.4% for 2020 overall.
The Denver metro, in particular, continues to be a favorable area for key demographics.
Looking ahead to 2021, we believe the Denver market will outpace the rest of the nationwide market, and there are several reasons why. The first is faster job growth. Last April, we lost about 170,000 jobs, but we’ve regained about 80% of them, and we expect this trend to continue. Second, there’s a confidence in payment that’s much higher than the rest of the country. According to a recent study, roughly 88% of homeowners and 71% of renters say they were confident that they’d be able to make next month’s housing payment.
We’re also seeing net migration gains, which means more people are moving into the state than leaving it. The Denver metro, in particular, continues to be a favorable area for key demographics. Millennials make up 54% of all homebuyers, and they're continually drawn to Denver for a myriad of reasons (restaurants and amenities, scenery, access to the mountains, etc.). Finally, 46% of adults report that they telework across the state rather than in person. Nationwide, the number of adults who telework is just 35%, and we expect this discrepancy to bolster the job market and real estate market here in Denver.
As always, if you’d like to know more about this or any other real estate topic, don’t hesitate to reach out to me. I’d love to help you.