The Denver real estate market is still white hot. The average home price is more than $912,000.
The median price for a single-family home is up to $730,000. This is a 12.3% increase from the prior year.
Real estate experts believe that Denver’s housing market is peaking. The average price was expected to reach $1 million by Memorial Day and this did not pan out.
Read on to learn about expert predictions for the Denver housing market. Explore what major economic news means for property in Denver for the fourth quarter of 2022 and beyond.
Rising Interest Rates
The United States Federal Reserve is aggressively raising interest rates to combat inflation. The Fed is expected to continue raising interest rates gradually for the remainder of the year. Without progress, rate hikes may continue even longer.
These actions by the Fed mean that home shoppers have less purchasing power. Mortgage rates are on the rise meaning that consumers are spending more of their monthly budget on financing expenses.
The Fed’s goal is to curb rising home prices. As mortgage rates rise, many prospective home shoppers are priced out of the market. This means less demand and sellers drop their asking price to receive an offer.
For the past several years, Denver’s housing market has been plagued by low inventory. The lack of competition in the market has driven home prices even higher.
Higher mortgage rates have already impacted the greater Denver area’s inventory situation. In a recent report by the Denver Metro Association of Realtors, it was reported that the number of active listings is over 6,050. This is a 66% increase from the prior month and a 94% increase from the prior year.
At the same time, the number of home closings is on the decline. The number of closed homes is down nearly 24% over the past year.
An Influx of New Denver Residents
One factor that may spare Denver from a significant decline is how attractive the city is. Many people are moving into the city and the surrounding area.
In the previous decade, the city’s population increased by 115,000. This was a 20% increase from the last time a census occurred.
Denver is particularly attractive for Americans living along the West Coast. They are fleeing high taxes and the cost of living in places like San Francisco and Seattle. For them, Denver is an appealing alternative as they can maintain a city lifestyle and employment opportunities.
Denver’s rising population is certain to keep demand afloat while higher mortgage rates take a toll. Ultimately, Denver may not see the same housing decline that other parts of the country experience.
Denver Housing Market Forecast
You are now up-to-speed on everything related to the housing market in Denver. Home prices are leveling off and the number of available Denver properties is roaring back.
Higher inventory and mortgage rates are certain to bring down home prices to a degree. However, an influx of new residents may offset some of the declines.
If you want to learn more about the Denver housing market, contact us today to speak with an expert.