Looking ahead to 2022, two Colorado cities made Realtor.com’s list of hottest housing markets expected to lead the nation in price appreciation and sales growth: Colorado Springs and Denver-Aurora-Lakewood. (Photo: Pexels).

Nationwide, 2021 brought the highest level of home sales in 15 years, according to National Association of Realtors® (NAR) Chief Economist Dr. Lawrence Yun. He also expects 2021 to end with a 15% national increase in median home prices. Next year will see prices rise about 2.8% as rents continue to rise.

“The housing market has been the one bright spot during the pandemic for two major reasons,” Yun said, citing low interest rates and the impact of COVID-19 as both the first and second reasons fueling the real estate market.

Looking ahead to 2022, two Colorado cities made Realtor.com’s list of hottest housing markets expected to lead the nation in price appreciation and sales growth: Colorado Springs and Denver-Aurora-Lakewood.

At the fourteenth hottest metro, Colorado Springs is forecasted to see a 10.3% increase in sales in 2022 compared with 2021, while prices are expected to rise 5.2% year-over-year. That’s a combined percentage change of 15.5%, according to Realtor.com.

The year-over-year growth forecasted for No. 58 ranked Denver-Aurora-Lakewood is a 6% increase in sales and a 5% rise in prices for a combined percentage change of 11%, reports Realtor.com.

This year’s top 10 are concentrated in the Mountain West, Midwest and New England, with Salt Lake City, Boise and Spokane as the top three. Across the top 10 markets home sales are forecasted to grow by 11.6% year-over-year in 2022 – nearly two times the 6.6% national home sales growth projection. Additionally, average home prices in the top 10 are expected to increase 7.4% – more than double the national pace of 2.9%.

While mortgage rates are expected to rise, they will remain relatively low with Yun predicting a rate of 3.7% by the end of 2022. Regarding inflation, Yun said historical data shows that real estate has served to hedge inflation for homeowners. He expects supply-chain issues to stabilize by mid-2022, easing inflationary pressure.

He also predicted the pandemic would continue to affect office workers’ choices about where to live. “We’re only in the first innings in terms of residential choices,” he said. “People haven’t fully digested the changes from the hybrid, work-from-home model.”

The 2022 analysis includes housing markets among the 100 largest U.S. metros expected to lead the nation in listing price appreciation and home sales growth. Following are the key trends expected to drive growth in housing hotspots, cited by Realtor.com:

Strong tech jobs, less crowding: This year’s top housing markets have an average of 60 fewer people per square mile and a strong job market. STEM – science, technology, engineering and mathematics – jobs also rank high, with half of the top 10 metros offering a higher share of STEM jobs.

Remote work and escape from the big city: LinkedIn data shows the share of job seekers applying for remote work in metros like Boise and Spokane is at least 6.8% higher than the national average. The report projects that workers are likely looking to get away from big city living without giving up a big city salary.

Millennials and retirees drive the market: More than 45 million millennials are at “typical first-time buying ages,” which puts them in the driver’s seat for housing demand. In four of the top 10 markets, seniors aged 65-plus account for nearly one-third of households, led by No. 10 ranked Tampa at 32%.

More affordable home prices: Median listing prices in the top 10 markets are an average of 8.6% higher than the national average, yet half have more affordable prices than the national average and the other half have lower-prices than key big-city feeder markets.

For more information on 2021 results, see magazine.realtor/live/article/2021/11/a-record-year-in-real-estate-sales. For the full list of Top Housing Markets of 2022, see news.move.com/2021-12-07-Realtor-com-R-Forecasts-the-Top-Housing-Markets-of-2022.

By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, email Tom at [email protected],
call 303.441.5620, or visit boulderco.com.