denver's new builds can't meet housing demand
/
By Carly Mallenbaum, Sami Sparber | Published on August 26, 2023
New Denver homes are popping up and selling quickly, but supply still can't match demand.
Why it matters: As U.S. mortgage rates hit a 20-year high, golden handcuffs are locking up Denver's housing inventory, and that's fueling buyers' appetite for new builds, according to real estate experts.
The big picture: Sales of existing U.S. homes — the great majority of houses sold nationally — slid 19% from a year earlier, while new home sales soared 24%, according to June figures.
What they're saying: "What we're seeing in Denver is the new construction tends to be on the outskirts of town," Kelly Moye, a local Compass agent and spokesperson for the Colorado Association of Realtors, tells Axios.
Northern Colorado, Southern Colorado and the Eastern Plains areas are now popular for builders because there's water and more land, so "they're able to provide a really nice new home for less money," Moye says.
Axios Denver reader Lauren Watkins said she started looking at houses in March and considered a new build, but ultimately purchased a home in Centennial.
"We decided we would rather be in a fixer-upper in a nice neighborhood that was established, rather than a new home in an 'okay' area that was further away from the city that lacked trees and neighbors," she said.
Between the lines: The number of listings coming onto the Denver metro market is down roughly 29% compared to June 2022, per Redfin.
State of play: The new-build boost comes after rising rates curbed pandemic-driven home buying demand.
Builder confidence is now at its highest level since June 2022, having declined every month that year, according to the National Association of Home Builders.
What we're watching: Some builders are offering smaller, more affordable houses to lure first-time buyers, Axios' Matt Phillips reports.
Newly built homes sold in the U.S. by region
The number of new homes sold in the West rose 35% in June compared to a year earlier, per the U.S. Census Bureau.
Existing home sales fell nearly 23% during that time, according to regional figures from the National Association of Realtors.
What's happening: New homes comprised nearly a third of total inventory in May, exceeding their typical 10%-to-15% share, according to chief economist Robert Dietz at the National Association of Home Builders.