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Denver, CO: Real Estate Market & Trends

Last updated on Wednesday - August 17, 2016

The average price for a home in the Denver real estate market was $369,000 in the first quarter of 2016. That number is the result of a 9.1 percent increase over the past year. That said, Denver real estate has skyrocketed in the last few years and is now dramatically above the national average of $215,767. The good news — especially for Denver real estate investors and homebuyers — is valuation sites expect higher price growth in Colorado with home prices anticipated to almost double the national average in the next 12 months, according to the National Association of Realtors.

Another component lighting the Denver real estate market on fire is home equity gains. The rate at which homes in Denver are appreciating is tremendously higher than the national average, which continues to be good news for Denver real estate investments. Moving forward, the Denver real estate market is primed for a breakout year in 2016.

Denver, CO Real Estate Market Statistics:

Denver real estate investments

According to Trulia, the average Denver home is worth about $314/sqft. That price represents an increase of 14 percent over the same period last year. Price appreciation and principal payments in the last three years have boosted total equity growth since the recession. Over the last three years (12 quarters), houses have appreciated 41.3 percent, which is nearly double the national average of 22.6 percent. For a more comprehensive breakdown of equity, refer to the following:

  • Homes purchased in the Denver real estate market one year ago have appreciated, on average, by $8,773. The national average was $15,781 over the same period.
  • Homes purchased in the Denver, CO housing market three years ago have appreciated, on average, by $40,574. The national average was $49,356 over the same period.
  • Homes purchased in the Denver real estate market five years ago have appreciated, on average, by $98,173. The national average was $68,727 over the same period.
  • Homes purchased in the Denver, CO housing market seven years ago have appreciated, on average, by $121,541. The national average was $59,758 over the same period.
  • Homes purchased in the Denver real estate market nine years ago have appreciated, on average, by $3,099. The national average increased $16,435 over the same period.

Despite consecutive months of price gains, Denver still has one major factor working in its favor: affordability. That’s right, Denver is more affordable than most markets. Having said that, the average homeowner in the Denver real estate market spent roughly 13.9 percent of their income on monthly mortgage payments in the first quarter of 2016, slightly less than the 14.5 percent the rest of the country pays. In terms of median home price-to-income, however, the Denver real estate market was higher than its historic standard. The first quarter of 2016 saw the price-to-income ration for Denver real estate rise to 2.5, an increase of 0.5 above its historical average and 0.1 percent lower than the national average of 2.6.

As of the first quarter of 2016, the number of homes in some stage of foreclosure in the Denver area currently consist of 1,636 properties. With U.S. home values having fallen drastically from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. According to Zillow, the percent of Denver homeowners underwater on their mortgage is 0.1.

Another bright spot for the Denver real estate market is the number of foreclosure filings in 2016. According to CoreLogic, the number of foreclosed inventory in Denver has dropped 34.9 percent from a year ago, with a total of 1,031 completed foreclosures in the 12 months ending May 2016. For Denver real estate investors, the number of new filings by foreclosure type is as follows:

  • Auction homes have decreased by 7.6percent over the past month, and 43.7 percent over the past year.
  • Bank owned properties (REOs) have decreased by 15.8 percent over the last month, and 42.9 percent over the past year.

Eventually, the combination of a decrease in auction activity and rising distressed property values will benefit the non-distressed home sellers. It’s hard to get properties to appraise for a mortgage that would justify a market price. As the lender-mediated properties draw better prices, you’ll see better comparables. That will take some time to take hold.

Fortunately, local employment growth in Denver is better than the national average and improving. The one-year job growth rate is 3.1 percent compared to the national average of 2.0 percent. At 3.3 percent, the current unemployment rate is better than national average of 5.0 percent, and 1.1 percent higher than one year ago.

Denver, CO: Real Estate Market Summary:

Denver housing market

  • Current Median Home Price: $369,000
  • 1-Year Appreciation Rate: 9.1%
  • 3-Year Appreciation Rate: 41.3%
  • Unemployment Rate: 3.3%
  • 1-Year Job Growth Rate: 3.1%
  • Population: 2,767,737
  • Median Household Income: $64,439

Denver, CO: Real Estate Market (2016) — Q1 Updates:

So far in 2016, the Denver real estate market has been one of the most stable markets in the United States. The city continues to fire on all cylinders, as home appreciation skyrockets while employment rates improve and new housing construction continues to boom.

Equity gains for the Denver real estate market have snowballed in recent months. The appreciation gain in the first quarter was 9.1 percent, compared to the national average of 6.1 percent. But it doesn’t stop there; appreciation gains in the last three years for Denver real estate are at 41.3 percent, nearly double the national average. That represents a total equity gained of $121,938 for Denver investors and homeowners compared to the national average of $49,356.

Another aspect benefiting the Denver real estate market is home affordability, which remains lower than most markets. Homeowners paid 13.9 percent of their income to monthly mortgage payments during the first quarter of 2015, while the rest of the country paid 14.5 percent. Better yet, that ratio is lower than Denver’s historical average of 14.2 percent, which goes to show how well the real estate market in Denver is doing. One component Denver investors and homebuyers should pay special attention to is median home price-to-income. Although the ratio (2.5) was lower than the national average (2.6) during the first quarter of 2015, it actually increased 0.1 from 2015 and 0.5 from it historical average.

According to the NAR, price expectations for Denver real estate are forecasted to grow faster than most of the country. Price expectations were 6.2 percent during Q1 while the national average was 3.8 percent. This bodes extremely well for Denver investors and homebuyers.

Denver, CO: Real Estate Market Review (2015):

Denver real estate investing

Heading into 2015, the Denver housing market was on fire. Homes were appreciating at a remarkable rate and the economy was keeping pace. Everything was in place to support one of the hottest real estate markets in the country. Fortunately, that trend continued through 2015. In fact, appreciation rates for Denver real estate actually increased 2.3 percent in a matter of months. However, perhaps even more importantly, the city’s job sector continued to provide strong support for the Denver housing market. The Denver’s unemployment rate in 2015 was a minuscule 3.9 percent–with much of the decline a result of the city’s impressive 3.3 percent job growth rate.

There were 802 homes up for sale in the Denver housing market in 2015, according to RealtyTrac. That number represents a 4 percent increase from the end of 2014 and a 5 percent increase over the course of a year. Not surprisingly, the number of properties that received a foreclosure filing in Denver was 10 percent lower than the previous month and 76 percent lower than the same time last year. The decline was likely the result of the area’s appreciation rates.

Of the real estate foreclosures in the Denver area in 2015, nearly 95 percent were set for auction. The remaining five percent were all bank-owned, which represents a significant decline from the year before.

Denver, CO: Real Estate Market Review (2014):

No more than one year after the height of the Denver housing market frenzy, prospective buyers were confronted with a remarkably tight inventory. At the beginning of 2013, there were approximately 7,610 homes for sale in the Denver area; the following year in 2014 there were 7,094.

While Denver’s problematic inventory numbers helped complicate the market during 2014, there was one upside: appreciation. Denver homes continued to gain value at a rapid rate during 2014, not unlike Houston and Dallas. “It’s staggering how great the market is,” said Your Castle Real Estate owner Charles Roberts. “There are only three neighborhoods that went down statistically.” The average Denver home gained about 10 percent in value in 2013 (even six percent is considered a good year), and the end of 2014 was similarly strong.

Denver’s constricted housing market, which has squeezed buyers since 2013, begun to impact the renting population. Higher home prices and quicker sales times in 2014 resulted in a larger number of landlords cashing out, leaving less homes for lease and pushing rents up. “As soon as properties are put online somewhere to rent, they are gone,” lamented Denver resident Caroline Grote. “It is a seller’s market and it is a landlord’s market.”

Similar to that of San Diego and other California markets, homes in Denver experienced significant appreciation in 2014. However, few markets appreciated as fast as Denver. Over the last year, homes in Denver were the beneficiary of a 10.4 percent increase, which is more than twice as much as the national average. Perhaps even more surprisingly, homes gained an average of $61,100 over the previous seven years, whereas the rest of the nation actually saw a loss of $11,500.

Of course, the growth of equity was entirely dependent on the purchase price. Therefore, homeowners that purchased in the Denver area for the better part of the decade were presently surprised – all things considered. From 2014, those who purchased a home nine years ago have seen an incredible return on their investment, as the average Denver home gained $101,638 in equity.

Fortunately for the Denver housing market, the local economic outlook remained strong in 2014. Employment became a stalwart of the community and is currently trending upwards. Over the course of the year, job growth experienced a 2.7 percent increase. Local employment growth was strong in 2014 and a whole 1.0 percent higher than the rest of the nation. Additionally, the unemployment rate in Denver was better than the national average.

Another aspect that played a big role for the Denver real estate market in 2014 were strong performances by individual neighborhoods. According to Trulia, “popular neighborhoods in Denver included Stapleton and Green Valley Ranch, where average listing prices were $412,874 and $234,428.” City Park, however, is one neighborhood investors may want to keep their eye on. In fact, Redfin acknowledged City Park as one of the top 10 neighborhoods of 2014.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.

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