Denver Real Estate Market Report
Denver recently ranked as the best city to live in the United States by U.S. News & World Report in 2016. The report looked at “quality of life, job market, as well as the value of living there and people’s desire to live there.” Anybody that lives in Denver knows there is a mass migration to Denver and other great cities and towns in Colorado. Take a peak at housing prices and rental rates and you will see without a shadow of a doubt – Denver is a hot place to live.
The housing market in Denver and the metro area have continued to climb the ladder higher. The average sold price for a home in the Denver area climbed to $377,917 – up 1.5 percent compared to last month. If you look at the year-over-year increase, the average sold price bounced 9 percent. Anthony Rael, Chairman of the DMAR Market Trends Committee, stated that “Homes priced below $325,000 are in such high demand that multiple offers well over list price will continue to be the norm until more listings come online.” Mr. Rael went on to say that many homeowners that bought in 2008-2011 are selling to move into a larger home.
The caveat is that the Denver area housing market had a record low number of active listings at 3,963 last month. This is a huge drop if you look at the Denver Metro Association of Realtors (DMAR) recent report, which stated that from February 1985- February 2015 the average number of homes for sale was 14,979. It appears that home sellers are waiting for the spring and summer market before they decide to list their home.
The luxury market in Denver and the metro area has shifted to a sellers market, according to the DMAR report. In Denver, there were 65 homes sold for $1 million or more, which is up 22.6 percent compared to last year. Inventory is tight in the Denver luxury market with an average of only 5.2 months of inventory. To put it in perspective, Douglas County has 13.3 months of luxury inventory. Broomfield luxury buyers have even more options with around 26 months of luxury inventory. A balanced real estate market is considered to have 6-months of inventory, less than 6-months inventory is considered a sellers market.
Real Estate Investment Outlook
One of the reasons we are bullish on the housing market for real estate investors is a recent article from The Denver Post. In the article the journalist stated, “The state demography office estimates that Colorado gained 45,300 new households in 2015 but added only 25,000 new housing units. Since the 2007 recession, the states home builders and apartment developers have undershot household formations by 128,000.” The report also mentioned the Zillow rent index, which showed the average rent in Denver in November 2015 was up 9.7 percent to $1,952 per month. Denver ranked third in the rent index by Zillow, which was only behind San Francisco and Portland.
The report also noted that the Census Bureau estimated that 101,000 people moved to Colorado in the months through July 2015. Colorado ranked second to North Dakota as the fastest rate of population growth in the United States. With 10,700 jobs added in December in Colorado dropping the unemployment rate to 3.5 percent, we think there is still room to run in the Colorado economy and the housing market. With the shortage of rental units available and the influx of people moving to Denver, we think rents will remain strong and vacancy will remain low.
Brought to you by Greg Pond, REALTOR for TJC Real Estate.
TJC Real Estate • 303.720.9199 • Greg@TJCRealEstate.com
Your Neighborhood Realtors® Since 2005