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Prices increase 9%, inventory remains historically low in hot Denver housing market

Average purchase price tops $700k
housing market
Posted at 5:32 PM, Apr 07, 2022
and last updated 2022-04-07 20:53:36-04

DENVER — Achieving the American dream isn’t getting any easier, especially in Colorado.

“I have been on Zillow for months and months and months,” said first-time homebuyer Olivia Reed. “It can be really intimidating to see numbers this high.”

But here's some good news — for buyers like Reed, persistence can and does pay off.

"Our offer was accepted,” Reed said. “With so many homes listed for "X" amount of money, but then you see them going for well-above asking price, you kind of have to figure out what is a realistic price point to start looking at, and then how do you make a competitive offer from that price?"

The numbers continue to be completely mind-boggling.

According the Denver Metro Association of Realtors (DMAR), the average home is staying on the market for just four days. The month of March saw appreciation at a staggering 9 percent, and the average purchase price is now $705,000.

“This neighborhood is called Dream House Acres,” said realtor Joy Dysart with HomeSmart. “Pretty catchy name."

Dysart listed a house here two-and-a-half weeks ago.

“It was on the market for $580,000,” Dysart said. “We basically had 60 showings, 13 offers, and we chose the best offer of that. We got an offer for $680,500. That was $100,500 over ask and the seller's got a post-occupancy of 30 days. Is that amazing?"

Amazing to some, deflating to others.

Experts say buyers far outweigh inventory in metro-Denver, and there are also investors in the market, both local and out-of-state, who are hard to beat because they offer cash and a quick close.

“Of the 13 offers, five were investors,” Dysart said. “A lot are from Denver, some are from California."

Dysart and others say the key to breaking into this market may be pooling resources and buying with a trusted roommate or friend.

“Two guys, two girls, roommate situations, whatever works,” Dysart said. “They have been doing that for years, but we're just seeing more of it now."

Reed is buying with her boyfriend. If it was just her income, it would be more challenging.

“Oh, absolutely,” Reed said. “I couldn't. It wouldn’t have been possible."

She and her boyfriend are now under contract and closing at the end of this month.

“I'm excited, but you know, I'm waiting for the closing date to come," Reed said.

For some perspective, the housing market in metro Denver has become so competitive, an economist with Zillow says you have to treat finding a home like a second job.

“That means every weekend, really, someone who's in the house hunt right now needs to go out there, tour a fresh crop of homes, probably pre-inspect them so that they're in a position to waive that inspection contingency, and then cross their fingers and hope their offer gets accepted,” said Jeff Tucker with Zillow. “It's tiring. It's hard work.”

“Once you’re in it, it’s hard not to be emotional,” Reed said. “For me, a non-negotiable at first was having two bathrooms, but as we got into the market a little bit, you have to compromise. We got a garage, we have a really nice backyard, so I’ll learn to live with one bathroom.”

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