Denver Home Prices Are Sky High

The latter half of 2020 and early 2021 marked a historic period for residential home sales in the Denver metro area. A combination of low inventory, low interest rates, and the pandemic-driven desire to live in more spacious, mountain-adjacent homes pushed home prices to unprecedented levels.

The paradox of this historical rise in home prices is that there are relatively few sales. Many local homeowners seem reluctant to sell, creating a significant problem for prospective home buyers in Denver. Unlike in the past, many of the homes on the market are intended for owner occupancy, not rental purposes.

Veteran local real estate brokers have observed a market frenzy reminiscent of the sub-prime meltdown from 2007 to 2010. However, this time it's different. There is no “funny money” involved—homebuyers must either have the cash or qualify for a legitimate mortgage loan. During the sub-prime era, buyers could often falsify a few details and be breathing at the closing table to secure a house.

Many brokers have noted a "fear factor" in the market. People are eager to leave the denser urban areas of Denver for the perceived safety and space of mountain homes, seeking protection from the Coronavirus. Additionally, there is a large influx of buyers from Texas, California, and Florida. These buyers are often purchasing larger homes to accommodate remote work.

The statistics are staggering. In surrounding counties like Pitkin, Eagle, and Routt, price increases from late 2020 compared to the previous year ranged from 122% to 458%.

In metro Denver, price appreciation was more modest, at around 21% by the end of 2020.

One real estate broker in Aspen referred to 2020 as "the great COVID migration," noting record prices for homes in the Aspen area. Another broker mentioned that the market could easily absorb five times its current inventory.