From luxurious resort cabins to land homes lining the Front Range, the pandemic has transformed housing markets across Colorado, pushing prices to record highs and the supply of listings to record highs — not exactly the result expected the worst disease outbreak to hit the globe in a century.
Over the past two years, the median price of a single-family home sold in Colorado has risen by nearly a third, while the already tight inventory of listings available for sale has fallen by nearly two-thirds, according to a Denver Post analysis of statistics released earlier this month by the Colorado Association of Realtors.
In a state of 5.8 million people, there were just 6,408 active listings on the market at the end of the year, down from 17,617 at the end of 2019.
“In 2019, we were starting to see a plateau in the housing market with appreciation below 5% in most areas, and homes were starting to stay on the market longer and longer throughout the year. COVID happened in 2020 and the expected decline in the real estate market made a sharp change. It turned out that a lot of people wanted to live in Colorado but were tied to their jobs elsewhere,” Kelly Moye, a Broomfield-area real estate agent, said in comments included in the year-end summary.
A vendor boycott is not the cause of supply shortages. The number of new listings placed on the market in 2019 was 142,040. Last year it was 139,212, down just 2%. But the demand side of the equation has definitely changed, with 130,810 homes and condos sold last year versus 115,492 in 2019, a 13.3% increase. If more houses had been available, it is likely that more would have been contracted.
What is unusual about the robust housing market is that it rides on historically low population growth. That certainly wasn’t the case in the early 1980s, when a downturn and out-migration hit the state’s housing markets hard.
Of the state’s 64 counties, 26 lost population between 2019 and 2021, said Patricia Silverstein, chief economist at Development Research Partners, during a market forecast hosted by the Denver Metro Association of Realtors, or DMAR. And among the counties that saw gains, growth rates fell well below the average annual pace of the past decade – due to fewer births, more deaths and restrictions on international migration during the pandemic.
“It was a year of very low population growth, one of the lowest we’ve ever had,” she said. And yet, home sales have increased 13.3% over the past two years.
Colorado’s housing markets have benefited from a higher concentration of millennials, said Nadia Evangelou, director of forecasting at the National Association of Realtors, during the DMAR forecast. During the last decade’s wave of migration, 53% of those who moved to Colorado were millennials, compared to 43% of those who moved nationally, she said. When the Federal Reserve pushed interest rates to historic lows, it had a strong incentive to buy, and the pandemic caused many renters to seek more space and a place of their own.
Silverstein notes that the largest single age cohort in Colorado is 30, and the average age someone buys their first home is 34. This means that the demand is increasing.
Higher elevation, warmer markets
The Mountain and Westslope housing markets grew the most over the past two years, among the 30 counties with 300 or more sales last year that were surveyed. The median price for a single-family home sold statewide was $529,995 last month, up from $400,000 in December 2019, a gain of 32.5%.
Pitkin County leads the state with a 97.5% gain in the median price of a single-family home sold over the past two years. This median home sale price was already high at $2.9 million at the end of 2019 and it rose to $5.75 million at the end of 2021.
Although high-priced homes and condos in resort counties can swing median and average values depending on what’s selling at any given time, Pitkin County saw a 67.4% increase in sales. , the largest increase in the state. It also had the largest percentage drop in active listings, which fell from 499 to 89 in two years, or 82.2%, another sign of a very active market.
“Anyone from anywhere else wants to be in the heart of Aspen. There have been multiple sales over $20 million,” said Ann Abernethy, associate broker at Slifer, Smith & Frampton RFV. the pandemic, many people wanted to create a life with more leisure and more outdoor space.”
Existing owners of second or third homes in the county have moved to Aspen during the pandemic, while affluent buyers in more congested, higher-tax states like California, New York and Connecticut have also taken on and moved on, making of the county a principal residence. The sharp rise in the value of stocks and cryptocurrencies in 2020 and 2021 has generated enormous wealth. And with inflation on the rise, the wealthy are looking for ways to protect their assets, and real estate is one option, Abernethy said.
Eagle County, which includes the resort towns of Vail and Beaver Creek, also saw strong demand, with the value of single-family homes rising 54.2% to a median of $1.65 million. The inventory of active listings fell from 744 to 195, a drop of almost 74%, while the number of sales increased by 19.4% despite an 8.3% drop in new listings in 2021 compared to to 2019.
But it wasn’t just about multi-million dollar ski mansions and condos. Between Pitkin and Eagle, the biggest pandemic price gains in Colorado were in three counties that aren’t normally considered upscale or hot.
Montezuma County, home to Cortez and the Ute Mountain Ute Indian Reservation, saw the median price of a home sold jump from $212,000 before the pandemic to $390,000 last month, an 84% gain . The number of home and condo sales in 2021 was almost 30% higher than in 2019, and active listing inventory fell about 40%.
Delta County’s median home sale price jumped from $215,000 to $364,000, a 69.3% gain, while Montrose County saw a 54.8% gain, from $267,450 $ to $414,000. Montrose County.
Still, not all mountain counties were a hot mess. Grand County had a two-year gain in median selling price of 14.1% to $781,128, the second-lowest after Garfield County, with an 8.8% gain to $511,250.
In almost any other context that would be a very respectable appreciation, but not during the pandemic. Those are the two smallest gains of the 30 Colorado counties surveyed. Both counties saw the number of available listings drop by around 60%, although Grand County suffered the largest drop in sales in Colorado between 2019 and 2021 at 6.2%. Broomfield County was the only other county surveyed with fewer home and condo sales in 2021 than in 2019.
Front Range Counties
The Front Range seems relatively restrained compared to the frenzy that gripped some mountain counties during the pandemic. But in historical terms, price gains have been anything but tame.
Douglas County leads metro Denver with a 40.9% gain during the pandemic. The median sale price of a single-family home there was $685,500 at the end of 2021.
Adams County was the only other metropolitan county to beat the state’s two-year gain of 32.5%, but just barely, at 32.6%. Long considered a pocket of affordability, the median selling price of a home there is now $507,878, down from $383,000 before the pandemic began.
Denver matched the 32.5% statewide gain and had a median sale price in December of $622,950, down from $470,000, according to the Colorado Association of Realtors. That’s more than the median sale price of $599,900 reported by DMAR. Price gains in Boulder, Broomfield, Jefferson and Arapahoe counties were less than the statewide median price gain, although it seems odd to describe gains still in the 30% range as “behind”.
Pueblo County managed to beat El Paso County with a 40.4% gain against 37.9% of the price of a house sold. The median sale price in Pueblo has gone from $215,000 to $301,900 while in El Paso it has gone from $330,000 to $455,000 over the past two years. What sets Pueblo County apart is that new listings grew the most between 2019 and 2021 — 18.5 percent — and available listing inventory declined the least, 9.9 percent.
Colorado Springs real estate agent Patrick Muldoon said in his comments that the real estate industry as a whole needs a strong rehab, which doesn’t leave him optimistic about what’s next.
“I don’t have a crystal ball in front of me, but the future may not be so bright this year. The United States has accumulated record debt. The middle class is being crushed. And the Federal Reserve painted itself into a corner and didn’t admit it. Raise interest rates, crush the economy – leave them where they are, super inflation becomes a very real problem. All of this affects real estate,” he said.