We all know that Denver’s real estate market it extremely competitive. By and large it seems a simple issue of supply and demand: there’s not enough housing supply to support the demand for it in Colorado. While this is very valid, there are other factors that are playing a part in this abnormally fierce market. And these factors are impacting markets nationwide, not just in the Centennial State. Consider the following:

Materials
Shortage of materials for homebuilders is having a huge effect on the market right now. When borders shut down due to the pandemic, it wasn’t just people who couldn’t get to where they wanted to go. According to Oakwood and other home builders, there was a 75% spike in lumber prices because of supply chain disruptions, mainly from Canada. If homebuilders can’t get their raw materials, homes aren’t getting built.

And it’s not just lumber. Homebuilders are slowing production due to skyrocketing commodity prices, a decrease in available land, and a shortage of skilled labor.

Space
During the pandemic, Coloradans decided they needed more out of home. If your house is bigger, it is much easier to work and study from home. This made larger, single-family homes in the suburbs (and beyond) very much in demand. Low interest rates are also impacting the market. Mortgage interest rates of 2% or 3% is almost like getting free money and buyers are taking advantage of that.

Investors
Making matters more complicated is a flood of investors who are seeing the appreciation values in Denver. While it’s true that prices are inflated, investors can see the value when you buy and hold a property for three, five, or ten years. Investors and those with deep pockets are waiving appraisals, as well. They are willing to pay cash for the difference because they’re confident they’ll make the money back.

While the process can be frustrating, becoming a homeowner in Colorado is achievable – you just need a little patience and persistence. The most important thing is finding an agent who knows the ropes and can help you through the process. That’s where Metrowest comes in – contact one of our experienced professionals today and let’s discuss your options!