2021 was a wild year in the Denver Real Estate Market. In this post we’re going to look back at 2021 and make the top 3 predictions for Denver’s 2022 Real Estate Market.
Top 3 Predictions for 2022 Real Estate Market:
3. Interest Rates Will Rise
We saw historically low rates for all of 2021, which was pretty incredible, but if you’re paying attention to the broader market, you know that inflation continues to increase therefore interest rates will have to rise at some point. Experts are saying that it is going to happen this year. The chief economist for the National Association of Realtors predicts we will see a three-point interest rate at 3.7% by the end of 2022, with the highest prediction I’ve seen being at 4%. The bottom line is, this will affect not only how much folks can borrow but also monthly mortgage payments.
2. Supply Will Remain Low, Demand Will Remain High
Between the years of 2010 and 2020 nearly 1 million people moved to Colorado. It wouldn’t be shocking if that number increases with the new census data. The pace in which Colorado is growing is creating a housing shortage. Homes are not being built fast enough and our inventory cannot sustain all the folks that are moving to the Denver Metro Area. We started 2022 with about 1500 listings, down 40% from the same time last year. We are seeing an uptick in listings after the holidays, but the demand is still far greater than available inventory. The best advice for buyers is to work with experienced realtors that help you make smart but aggressive offers and to be patient.
1. My top prediction for 2022 is that double digit appreciation will continue.
With the continued issue of supply and demand, we will see prices rise. The median home price in Denver went up 20% in 2021, so homeowners thinking of selling are going to benefit the most. This seller’s market mixed with an increase in new Denver Metro Area conforming loan limit of $685,000 increasing buying power makes it the perfect time to sell your home.
There you have it, our top three predictions for 2022. So, what does it all mean? Well, sellers are still firmly in control. An increase in equity from 2021-2022, gives sellers more buying power when they turn around and try to go find a new place. For buyers, stay persistent and patient. Buyers are winning in this market by making smart offers that are aggressive.