Residential real estate across the United States continues on its upward trajectory. New York City’s covid doldrums have given way to market forces yet again. While top properties along Central Park South and Billionaire’s Row are transacting at almost double their 2016 prices, properties out west, in Denver and Phoenix, for example, are hitting all-time highs. The cause remains low available supply and historic lows in interest rates.
While a Prince can transact at almost $200 million for a skyrise pad, out in Denver, high-rise living has value in the $1 to $4 million price range. Urban living in Denver is showing a slight value to expansive homes in the Denver suburbs. With less than 15 days supply of detached home resales, the average Denver home sale is now $725,000. With low supply, affordability is pressed because higher-priced homes are transacting and impacting the average closing price.
Those anticipating a boom in foreclosures are still waiting for the “right time.” Since the 2008 Financial Crisis, the bulk of homes turned into rentals and not brought back to the market have solidified the housing boom. Supply constraints for new homes have again kept supply low and pricing moving upward with demand. Employment remains strong and the fear of approximately 1.9 million homeowners requiring a short sale or foreclosure is hardly causing a boom for the foreclosure home buyer.
Housing fundamentals remain strong and are on track in mid-2021. Having more space for the increased price is causing multiple offers on detached single-family homes in Denver’s metro market. Covid has become less of a concern as American’s return to a hybrid-work environment vaccinated and the expectation that working from home is a doable and profitable alternative to the pre-covid American workplace.