May 2022 Residential Roundtable Denver Market Update
The May market stats for Denver are out, and our roundtable panel is back to discuss what they mean. Envision Advisors agents Jenny Bayless and Preston Newberry and lenders Joe Massey and Travis Sperr join Chris to talk about the numbers, trends, and their outlook for the market. Listen to the episode to learn why buyers should feel optimistic even in this seller’s market. For all of the stats, go here

The May market stats are out, and our roundtable panel is back to discuss what they mean.  We’re finally seeing some relief in the market, with inventory in the Denver metro area up 76% over this time last year.  Granted, that’s still 24% down from where we should be historically, but the extra inventory is giving buyers more opportunity.  While we’re expecting to see things slow down, it’s still a seller’s market and we aren’t anticipating price drops. 

To hear the full discussion with Envision Advisors agents Jenny Bayless and Preston Newberry, lenders Joe Massey of Castle & Cooke Mortgage, and Travis Sperr of Renovo Financial, and me, listen to the podcast or watch the YouTube video.

Three Learning Options!
  1. Listen to the podcast “#381: May 2022 Residential Roundtable Market Update” Denver Real Estate Investing Podcast
  2. Watch the YouTube video (at the bottom).
  3. Read the blog post. Note, the blog is an executive summary. Get the in-depth breakdown from the podcast or video.

May 2022 Denver Market Stats with Ideas and Observations

Active Inventory

  • Increased 76% from same period last year!
  • 3,650 active listings on 5/31.
  • Home inventory grew 112%; condos grew 12%.
  • The historical average is 15,200 listings for May, so we’re at 24% of historical.  Much better than we were last month.
  • The record high inventory in May was 30,500 in 2006.
  • There are potential headwinds limiting further growth in inventory:
    • From 1985-2007, owners tended to stay in their homes for 5-7 years.
    • From 2008-2022, owners are staying in their homes for 11-13 years.
  • The Boomers are not (yet) trading down to smaller home en masse to create inventory as we anticipated.
  • Its possible in the near term (say, 6-12 months) the “shock” of mortgage rate spikes will “lock in” many potential sellers.
  • Thus, inventory growth might be less than otherwise anticipated.
  • How to fix that?  Mortgage rates will likely come down in the next recession (estimated: 15-18 months out, based on historical trends).  That might encourage more listings (and suppress the number of buyers).
  • Inventory will probably grow at a slow rate for the next year or so.

Closing Count

  • Down 4.5% from same period last year.
  • That’s an improvement from the last few months, when the volume was down even more than that.
  • YTD volume is off 7% from 2021.

Under Contract

  • Down 3% from same period last year.
  • Overall, this is encouraging.  When you look on a national level at the last several times that mortgage rates suddenly went up 1% or more, on average you see an 11% decline in sales volume over the next year.  It appears that Denver’s current market is more resilient than the historical national average.
  • Nationally, the number homes pending sale is down -9%.

Price

  • YTD, prices are up 14% from 2021.
  •  Comparing just May ’22 to May ’21, prices were up 15%.
  •  I do expect this pace of price increase to slow down soon.
  •  The consensus of 40+ economists and real estate “experts” is that we’ll have around 8% appreciation for all of 2022 nationwide.  Most of that in the first half of the year.
  •  Denver homes were up 15% and condos were up 11% in May.
  •  The average home price was $805,000; the average condo was $494,000.

Rentals

  • The population is growing, and the construction isn’t keeping up. 
  •  Intense demand for rentals has driven rents up 13% year over year.
  •  The pace of rental increases will certainly slow down, but don’t expect any declines in rents, even in the upcoming recession.

Source: The above executive summary is from Lon Welsh of Your Castle Real Estate

Denver Housing Trends May 2022

May 2022 Residential Roundtable Denver Market Update Data Snapshot
May 2022 Residential Roundtable Denver Market Update Month End Active Listings and Month End Closed Homes

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YouTube Video

May 2022 Residential Roundtable Market Update

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Authors
Chris Lopez
Chris Lopez is a Denver area real estate entrepreneur and investor, as well as the host of Bigger Pockets’ House Hackerz and the Denver Real Estate Investing Podcast.
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