When the pandemic began, many areas implemented restrictions that resulted in more people spending time in their homes. This change in the way people spent their time created changes in the real estate market itself. In Colorado, the housing market saw an increased demand for homes, accompanied by a reduction in the number of available homes for sale, pushing the market price of homes upward.
The State of the Colorado Housing Market
Based on data collected from the Colorado Association of Realtors, the overall number of homes for sale in the state dropped to 100,000 homes in 2021. This is a lower number than the average, causing a supply and demand issue in the market. At the same time, housing prices increased by more than 18 percent. In the past, sellers could expect their homes to remain on the market for an average of 44 days. However, with the reduction in available homes, many sellers were able to close a sale in just 29 days, a 37 percent decrease.
More Time at Home Leads to a Desire for a New Home
Colorado residents were spending an average of 17 percent more time in their homes during the pandemic restrictions. This increase in time spent at home led many people to feel dissatisfied with their current home, leading them to look for a new home to accommodate their needs. While residents are now only spending about five percent more time at home with restriction reductions, they still want a comfortable home, driving the demand to remain high while supply stays low.
Colorado’s Rural Communities Saw Greater Growth
The entire state saw higher real estate growth than other areas of the country, but the rural communities experienced the most significant growth within the state. However, part of the reason for the higher growth in Colorado is that the state lagged behind surrounding states for housing prices before the pandemic. The state needed to catch up to the real estate trends in neighboring states to bring their market up to the current standard.
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