Just like the entire US real estate market, Denver real estate has been feeling the effects of recent volatility as well. Yet even as other markets around the United States are exhibiting different types of behavior, Denver real estate in 2023 is unique in its own specific ways.
In fact, in many aspects, Denver is bucking the trend set by rising mortgage interest rates that have hamstrung many would-be buyers in terms of the size of the property they can afford. Let’s take a look at how the Denver markets are most likely to be heading over the next several months.
Record-Breaking Behavior Even Amidst Economic Uncertainty
Across the entire US real estate market, the last 12 months have been a rollercoaster to be sure. Starting with the US Federal Reserve hiking base rates beginning in March of 2022, mortgage lending has become incredibly more expensive than it’s been in decades. This has spread chaos and uncertainty across countless markets. However, this isn’t necessarily the case with Denver real estate. In fact, according to the Denver Metro Association of Realtors, the region’s housing market broke several records in January of 2023 when it came to new highs in average close price for not just residential properties but detached properties as well.
Yet even as close prices soared, inventory in the Denver metro area was down to new lows as well. January 2023 saw the lowest numbers on record for both residential and detached listings. Yet even with inventory plummeting, the number of closings in January was massive. It also smashed previous records, indicating that even though the relative supply of properties in Denver is low, demand remains incredibly high as evidenced by immensely high average close prices on those properties. In other words, the economic uncertainty that seems to be plaguing much of the country doesn’t seem to be having as pronounced an impact on Denver real estate.
To Infinity and Beyond?
In fact, even more research indicates that this strong real estate market in Denver is likely to shift in a fundamental way throughout much of 2023. Property inventories may undergo a reverse shift, according to the Knock Buyers-Sellers Market Index. Knock’s analysis found that out of the top ten real estate markets where buyers would become more advantaged over the course of the year Denver made the top three, trailing behind Dallas and Salt Lake City.
Knock says that Denver’s new housing inventory is likely to peak in the fall of this year, which would leave any prospective homebuyers willing and able to wait until then in an advantageous situation. Yet this increased inventory isn’t necessarily going to exert much downward pressure on the record-high property prices in Denver currently, as Knock forecasts that the Denver real estate market has a high likelihood of remaining stable throughout the rest of 2023 even with these higher levels of availability.
How Denver Real Estate Professionals Can Plan for the Future
Anyone currently working in real estate in the Denver area will naturally take these forecasts as good news, especially when there are other markets around the country that are encountering much more volatility and uncertainty. Projections for increased inventory throughout 2023 that will meet demand in ways that won’t necessarily impact closing price is a win-win for agents and brokers alike, as such a market provides countless opportunities for growth.
Yet it is important to keep in mind a few things. Preparing for this growth market is a must, as you don’t want to find yourself losing out on clients because demand for your services outstrips your ability to provide those services. Putting plans in place now to cope with 2023’s predicted uptick will help you expand your ability to keep up with the market and not miss out on these growth opportunities. If you’ve been thinking of expanding your offerings, now may be a good time to finalize those plans so you don’t have to scramble to keep up.
The Final Word on the Future of Denver Real Estate
Nothing is ever set in stone. As positive as these forecasts are for the Denver real estate markets, they are just predictions - and predictions aren’t always reliable. The writing on the wall is certainly there if you review the market research, which means that real estate professionals working in the Denver marketplace do have some excellent news on the horizon. Yet it’s still essential to understand that real estate markets can go through fundamental changes in what seems like the blink of an eye. A formerly rosy outlook can change very rapidly, revealing that reality is much different than what was forecasted to happen.
That’s why it’s never a bad idea to hedge your bets when it comes to your approach to growing your business in 2023. If you’re operating in the Denver region, making plans for a sudden boom in activity for the end of the year is an excellent way to prepare for that eventuality. By the same token, have some alternative plans in place if the market doesn’t behave as predicted. With the rest of the country going through such a volatile time at the moment, it’s crucial to keep a close eye on things so that you can alter your strategy if necessary. After all, the last thing you want is to be caught unawares when the market moves suddenly in either direction!