In 2006-2007 we had over 30,000 properties on the market in the metro area, single-family homes, condos and multi-family listings. Today we find ourselves with a shortage of inventory with only 2,541 properties on the market with a continued high-demand as many people continue to relocate to the Denver Metro area. A balanced market between buyer’s and sellers would constitute an inventory level at or better then 20,000 properties on the active market.
A lack of inventory and continued demand will keep sellers firmly in control of metro Denver’s housing market next year. However, currently mortgage rates are at all time lows. If we see an increase in mortgage rates homes will become less affordable and it may keep a lid on future price gains, according to a forecast from Realtor.com.
The steadiness in mortgage rates in the first half of this year followed by the rise of mortgage rates in the second half of this year could help to dampen some of the price momentum, as affordability becomes a bigger hurdle again for homebuyers,” said Danielle Hale, chief economist with the residential real estate portal.
Metro Denver is expected to see a 12.5% increase in home sales this year, which ranks fourth highest out of the 100 metro areas examined, behind only Sacramento, Harrisburg, Pa., and Charlotte, N.C., according to the forecast released in December of 2020.
One thing to keep in mind are the demographics of the country. The millennial generation is the largest generation this country has ever seen eclipsing the baby boomer generation by almost 10 million. The millennial generation is now 22 to 38 years old, reaching an age where buying a home is not only more desirable but more of a necessity.
What does all this mean? Until we see either a dramatic increase in the supply of homes or a dramatic decrease in demand (possibly due to a large increase in mortgage rates) we are most likely to see appreciation for years to come. I acquired two more rentals this year, I would suggest you do the same!
Denver Real Estate Moguls
1449 Pennsylvania St,
Denver, CO 80203