The Market Report: Denver, CO
For the past five to seven years, Denver has continually sat high atop national real estate lists - ranging from 'steepest price increase' to 'strongest housing markets' to 'best places to invest.'
Although we have seen a slight slowing in the market in the past few months doesn’t mean there is a crash on the way. Think of it more as an easing off of the extremely hot market that has recently been fueled by the surge in population and increase in market demand.
Just a few facts and figures below:
Denver metro is still at a shortage of 78,000 homes
Market health score is 9.3 (1)
Homes with negative equity is at 6% (1)
Number 7 in states predicted to have the strongest housing markets in 2018 (2)
Unemployment is at 3.4% (3)
Number 9 Hottest market in the USA (3)
Housing prices have seen double-digit growth for the past 6 years (4)
THE NOT SO GOOD
13th costliest city in America (4)
Average single-family home price is over $500,000
Metro prices up 65% (5)
Shortage of entry-level homes/ highly competitive (5)
The least affordable market for first-time home-buyers (6)
Home prices increasing faster than wages (6)
47% home price vs income price metric making Denver the number one boom market (7)
In conclusion, Denver is still a healthy market, but the barriers to entry are a mile high if you’re trying to buy your first home.
The main reason the gap between home prices and wage continues to increase is due to the mass migration of people from more expensive markets (think California) with massive buying power. Over the next 2-3 years economists predict a slowing in the Colorado market, but with the lack of inventory it’s really going to depend on wage and population growth numbers, as well as more sellers being willing to list rather than remodel their homes - another merging market trend. Drastic price drops are not predicted for metropolitan areas, and any major market crash would be driven by national economic events (think 2020 election, wars, major trade products crashing, etc.).