Metro Denver Real Estate Market Predictions for 2021 Mostly Positive with Strong Sales but Modest Price Gains
Americans have embraced every challenge, moved immovable obstacles, and defeated powerful enemies with steadfast determination since the Pilgrims landed at Plymouth Rock. As we enter the New Year, most people are thinking about 2021 as the year when we will return to something fairly close to normal. Most home buyers and sellers, real estate investors, and industry observers, are probably pleased with recent real estate market projections that expect strong sales with more modest prices in 2021.
Inventory will remain on the low side during most of the New Year, according to Realtor.com, keeping sellers firmly in control of metro Denver’s housing market, but higher mortgage rates will make homes less affordable and keep a lid on future gains.
Metro Denver is expected to see a 12.5 percent increase in home sales next year, which ranks fourth highest out of the 100 metro areas examined, just behind Sacramento, Harrisburg (PA), and Charlotte (NC). But home prices, after revving at a 12.8 percent pace in October, will run a more modest 5.4 percent locally, ranking Denver 33rd on that measure, tied with Columbia, SC.
Mortgage rates may rise to about 3.4 percent from current rates below three percent. Sellers will continue to hold the upper hand, even as more of them are forced to list due to the expiration of forbearance agreements, which has allowed millions of households to skip making mortgage payments.
The medium age for purchasing a home in the U.S. is 34, and many millennials are anxious to get a place of their own. Nationally, there will be 7.4 percent more people turning 34 in the next decade than in the past decade. Metro Denver is expected to see less buying pressure in the years ahead, with only a 1.8 percent increase in people turning 34 in the next decade.