Denver's housing market is ‘four-alarm fire’ hot, realtor says
Denver's housing market surged throughout the COVID-19 pandemic, and lately, it's been growing even tighter.
"Our market is just so red hot — I mean, it's not just red, it is a four-alarm fire," Coldwell Banker Residential Brokerage Realtor and Broker Associate Kathy Casey told Yahoo Finance (video above). "And being a Colorado native... it is really kind of heartbreaking to see how expensive things are in the old neighborhoods and how quickly that has gone up."
The median home value in the Denver market is $599,742, according to Fortune Builders' 2022 Denver housing market overview, while the median list price is $629,290. The typical home on the market is being snatched up after just six days.
"Thanks largely to an expanding economy, increasing sentiment, and — ironically — a lack of available inventory, real estate in Denver has ridden a wave of positive indicators to get to where it is today, to the tune of a 158.5% increase" in the past decade, Fortune Builders CEO Than Merrill wrote.
"We've seen double-digit returns here for the past several years," Casey said. "So I think last year was 20% equity, is what it was just one year. And imagine that's been year over year over year, so it's almost compound equity almost acting like compound interest."
'Anything goes in our market'
There are two primary drivers pushing Denver home prices through the roof, Casey explained. The first is that homeowners are "taking advantage of their homes being able to sell at a high rate, and they're cashing out and they're moving to other places."
The other reason is the continued influx of people to the mile-high city that "are generally coming from the coastal areas," Casey said, adding that with the rise in remote work during the pandemic, those coming from even more expensive markets still are finding Denver's housing market relatively reasonable.
The strongest demand is for single-family starter homes. Though the higher end of the market has also been competitive, Casey said.
"It's more of people really just trying to get in on this very hot market, and just homeownership being, as you know, paramount for just being the cornerstone for building wealth," she noted. "But we also have, in our million dollar market — million dollar, million and two, million and five — it's still hot as well. We will find competing offers in both those markets. But obviously, the lower we go, the more competition that it is."
Consequently, those trying to get a foothold in the American Dream of homeownership are having to resort to extreme measures.
"It's really not uncommon to see $100,000 over asking price in our market," Casey said. "You really have to kind of be creative if you're looking in the market these days. I mean, I've seen so many things as a listing agent."
Casey mentioned that she's seen potential buyers offer season tickets, pizza for a year, moving supplies, and even puppies to sweeten the deal. "Anything goes in our market," she said.
Edwin is a producer for Yahoo Finance. You can follow him on Twitter @Edwin__Roman.
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