As a real estate agent, the most common question that I’m asked is, how is the Denver market? Well nothing too drastic has changed in the past few months. Prices are still on the rise and inventory remains low. But here are some quick Denver Market Stats from July 2017:
- Average price of all residential sales in July was just over $436,000
- The 12-month moving average appreciation rate, which is the best measure of real trends in prices, was 8.52%
- There were 4,929 homes that changed hands in July, down 0.5% from July of 2016
- We ended the month with 6,323 homes on the market, which is down 5.8% from the 6,710 homes available at the end of July in 2016
These numbers represent the ENTIRE Denver-Metro area and of course are more specific by zip code. If you’re interested in seeing what happened where you live, please fill out the contact form below and I’ll get right back to you with your specific numbers.
Well, this is a bit of loaded question and everyone has their own opinion. In my opinion, Denver is NOT in a real estate bubble and will likely continue to appreciate for the long-run. Some of my reasons for this opinion include, job growth, patterns of people moving into Denver, and strength of the Denver economy. But that is likely another blog post for another day. However, SMDRA (South Metro Denver Realtor Association) recently released the below statistics on the Denver market which I believe also contribute to the fact that Denver is not a bubble.
Contributing factors to a limited supply of home sales:
- 69.3% of Denver homeowners undertook home improvement projects in 2014 and 2015. This was the highest rate of home improvements in the country.
- A home advisor survey discovered that Denver homeowners are the third happiest in the country.
- Harvard University’s joint Center for housing studies is predicting that homeowners 65 years old and older will account for nearly 1/3 of the total amount of remodeling dollars spent by 2025. This is a drastic change in the longevity of home ownership and reinvestment in existing properties versus move up, move down, etc.
- Median home ownership tenure has risen to almost 10 1/2 years in Denver, up from five years in 2008.
- Many people closed on long-term mortgages at interest rates in the threes.
- Older homeowners can’t downsize since over 200,000 adult kids still live at home.
Statistics about housing:
- New home sales peaked at 20,000 annual sales in 2005. 2014 through 2016 were 6,516, 7,835 and 9,253 respectively. Builders only started 11,038 new homes in 2016.
- In 2014 builders built a total of 14,100 new apartments and homes. In 2015 and 2016 they built 16,284 and 19,215 respectively.
- Between 2014 and 2016 Metro Denver has grown by approximately 182,000 people
- Population increase of 182,000 people required 72,800 new homes and apartments. We built 49,603, or approximately 23,000 less than needed.
- A healthy real estate market has a new residence built for approximately every 1.5 jobs created. 2013 three 2016 Metro Denver added 191,000 new jobs. Our building to job ratio is one home to every 6.5 jobs
- To keep pace with job and population growth, we should have built 89,000 more single-family homes in the last four years.
Statistics about builders:
- The big production builders are taking 10 to 14 months to build a new home. That is double to triple the time it took 10 years ago.
- Denver is one of the slowest counties in the country at approving construction permits. 8.2 months.
- Apartments accounted for greater than 95% of multifamily construction since 2010 as a result of construction defect laws. This keeps inventory of condos extremely low.
- Regulatory cost for home builders has increased 30% in the last five years nationally.
- According to CSU’s Department of construction management Colorado currently has a shortage of 70,000 workers in the construction industry. This will grow to 96,000 in eight years
- Only 3% of 18 to 25-year-olds express interest in choosing construction trade as a career choice. 48% of them said it’s to physically demanding and another 32% said they believe the work is difficult.