Home values in the Denver metro area have continued their ongoing year-over-year climb, with one report estimating the median price could reach $650K by the end of 2022.
New findings from investment banker Goldman Sachs predicted that a record home buying frenzy accelerated by the pandemic will not end in a crash. Due to limited inventory, the report said, home prices could rise by another 16% by year’s end.
This forecast would result in a median single home price in the metro area of $651,290 by December.
Home values have risen at a steady clip for several years running, but the sheer pace of the climb has surprised forecasters and residents alike. Just seven years ago at the end of December 2015, the median sales price here was $311,900, according to the Colorado Association of Realtors. A doubling of that figure in such a short time represents an area record.
Compared to the national average, prices have risen both faster and further in the metro area. 2021 produced an especially pronounced difference. Denver and the nation began the year with a similar median price ($485,000 versus $473,500, respectively), but by December that same year, the difference was $563,000 to $485,500.
Some real estate professionals told CNTV they weren’t surprised by the meteoric rise. After all, Colorado has been the sixth-fastest growing state in the nation over the last decade, so the demand for housing is clearly strong.
“As Coloradans, we’ve known for a long time that our state has some of the best quality of life that this country has to offer,” said Rick Bonilla, an Arvada-based realtor and investor. “These numbers indicate that our secret is out.”
Suzanne Caruso, another real estate professional with her own ten-agent practice based in Lakewood, agrees. “Between the sunshine, the outdoor activities and a robust local economy, this really is the place to be,” she said. “The market reflects that value.”
The local rise in home prices mirrors a nationwide trend that was already underway before the pandemic began in March 2020, said Caruso. “We’d seen an influx of people leaving the more expensive coastal cities for less expensive cities over the last decade or so,” she said. “But the pandemic really accelerated that trend.”
Bonilla pointed out the cultural impact of Covid living as well. “Suddenly everyone’s working remotely, and new possibilities really open up. Plus you’ve been cooped up at home for months. Why not pack up and head for the mountains?”
That said, rising prices may carry other consequences for the area, such as impacting diversity gains that the region has made over the last decade. Affordable housing could also become even more scarce—an issue that has already concerned many local officials and residents.
But unlike most coastal regions with boundaries dictated by water, the Denver area still has plenty of land for expansion. So it’s likely that new construction starts will rise accordingly to meet the demand, as long as buyers don’t mind living farther away from Denver.
“Luckily, folks in this region don’t mind doing a little driving,” said Caruso with a smile. “And Jeeps still get excellent gas mileage.”
