Last year was one for the record books for the Denver-area housing market. Buyers snapped up $22.23 billion in single-family homes, condos, and townhomes, eclipsing the previous record set in 2015 by almost $2 billion, according to the Denver Metro Association of Realtors. Year-over-year sales were flat, with a total of 55,634 homes trading hands.
At a time when the inflation rate was less than 2 percent, home prices soared. The average price of all homes sold for the entire year was just under $400,000, a 10.06 percent jump from the previous year. The median price of all homes sold sat at $349,900, rising by 11.43 percent.
Both single-family and condo home prices set records. The average price of a single-family home sold at $442,467, booking a 9.07 percent increase from 2015. Meanwhile, the average price of a condo showed an even bigger percentage gain with a 12.1 percent increase. There were only 1,025 active condos and townhomes on the market at the end of December and condos accounted for 24 percent of total active listings.
In total, there were only 4,265 homes available to be purchased at the end of December, the lowest number on record for a December. The extreme shortage of homes led to a mere 1.09 months of inventory, an 8.4 percent drop from a year earlier. For homes priced from $100,000 to just under $500,000, there was less than a month’s inventory available to be purchased. Even for homes priced at $1 million or more, there is only a 7.63-month supply of unsold homes.
So what is in store for 2017? While no one knows for sure, the low supply of homes is likely to continue to put pressure on home prices. At the same time, the higher prices themselves, as well as rising interest rates, are headwinds that could damper sales and home prices this year.