Denver Sets New Record Home Price Amid Surge in Bidding Wars

Denver is not supposed to see record home prices during the winter months. Spring and summer tend to be hotter seasons, from both a temperature and a sales perspective.

But according to the March report from the Denver Metro Association of Realtors, the real estate market in the metro area has again defied expectations, with the average price for a detached home landing at just shy of $740,000, surpassing the old mark by more than $10,000.

Demand continues to overwhelm supply on the local scene, as has been the case for more than a year. The number of new single-family, detached-home listings active at the end of February, the most recent month for which statistics are available, is actually up from January — 853 versus 788. But that's still a decrease of 23.74 percent year over year. And although bumps were seen from January to February in new listings (from 2,376 to 2,910) and closed properties (2,015 to 2,141), these figures are extraordinarily low when viewed historically.

A graphic from the report, which runs from January 2008 to January 2022, puts the assorted factors in perspective. The yellow line corresponds to active listings at the end of each month, while the blue line shows sales that closed over the same periods:
The average cost of a detached home in Denver surpassed $700,000 for the first time in May 2021, en route to a record-setting $728,385 in June. That was followed by a dip to a slightly lower plateau over the next four months: $687,176 in July, $685,832 in August, $688,629 in September and $684,700 in October.

In both November and December, the average broke the $700,000 barrier, again, landing at $703,847 and $704,716, respectively, before dipping to $688,127 in January. This drop proved short-lived, however: The February 2022 average of $739,950 is the highest DMAR has ever recorded. The median price spiked, too, going from $599,000 in January to $635,000 in February.

Why is this happening now? The association characterizes buyer demand as "hyperactive," and assorted metrics back this up. The average amount of time listings are lingering on the Multiple Listings Service, or MLS, tumbled from nineteen days in January to fourteen in February; the median days also fell, going from five to four over that same span. Moreover, the closing price in February was 105.20 percent of list, a rise of 2.91 percent in a month. That translates to thousands of dollars above the asking price required for success in the overwhelming majority of sales.

Andrew Abrams, chair of the DMAR market trends committee, as well as a local realtor, stresses that there are exceptions to this rule. "Last month, I had clients close on a house for $10,000 under asking price in the same week that I had clients close on a house $250,000 over asking price," he says. "The biggest difference between the two was location and condition."

Given the realities of the current market, Abrams suggests that realtors must "wear a lot of different hats: therapist, analyst, driver, motivational speaker and, most importantly, educator," since helping their clients understand the environment in advance could help reduce the sticker shock.

But it probably won't eliminate it entirely. Click to read the Denver Metro Association of Realtors March 2022 market trends report.