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Denver Colorado Housing Market Report

Metro Denver’s Housing Market Coming Alive

Rebounding from 2018.  The 2019 housing market in Denver, Colorado is looking good for home buyers and apartment rental investors alike. All areas of the housing market are forecast to perform well this year.

With Millennial renters and buyers making Denver one of their top destinations combined with strong economic performance across Colorado, the housing market looks like a solid investment.

Recently, Wallethub named Denver, Aurora, and Colorado Springs in the top ten of all US large cities to start a business. Colorado Springs was named the third best place to live in the US by CNBC. The region is definitely a hot zone for migration, business and housing.

April Housing Prices in Metro Denver

In April, the average home price in the metro Denver area achieved a record high of $553,371. The average condo price in April rose 2.6% to $368,565. According to Realtor.com, the median listing price is $390k while the median sold price is $380k.

The lull in home buying during 2018 and in the last few months is ending. Buyers appear to be gaining confidence in the economy again. With active inventory up 11.4% in Denver, sales increased 4.2% driving median prices up 1.2%.

Screenshot courtesy of Denver Metro Association of Realtors

Redfin and Zillow have different home prices yet they all rate the Denver housing market as competitive.

Screenshot courtesy of Zillow

Although homes had been selling slowly during the 1st quarter, that trend has reversed itself as this spring report will reveal. Much of the pessimism reported regarding sales and prices might not be warranted as the greater US economy is doing well.

Supply and affordability will again take center stage as the top issue for 2019/2020. In April, listings grew $36%, however only 1.5 months of single-family housing inventory and 1.49 months of condo inventory exists. 5-6 months of inventory is needed to balance buyer demand and sellers intent.

DMAR states that the luxury market in Denver was particularly strong. The highest priced home was $8.4 million and the highest priced condo was $5.4 million. The luxury market is already over the $1 billion mark in total transactions.

Colorado’s Booming Economy

The Denver housing market and real estate investment market forecast has been bolstered by a steady and strong Colorado economy. Colorado is ranked 2nd in the nation overall economically, and tied with Hawaii for lowest unemployment rate. Colorado is one of the states benefitting from the exodus of California people and businesses. The cost of living, lower taxes, and excellent lifestyle are hard to resist.

Denver Home Price History Timeline courtesy of Tradingeconomics.com

Strong consumer spending, IT and aerospace industry activity, along with a booming stock market, federal tax breaks, and a resurgent oil and gas industry have made Denver and Colorado the new economic star of 2019.

Even Colorado governments are happy with growing capital funds for big infrastructure and education projects.

Big Trade Shows and Expos Reveal Strong Interest

Before we get to the rest of the Denver housing market stats for April, we thought you might like to know about the biggest event of the year in multifamily and apartment ownership — Apartmentalize.

If you’re interested in buying a condo, home or apartment in 2019, it’s a big investment. You’d be wise to make the trip out to Denver in late June for the biggest multifamily/apartment trade show event of the year. It’s called Apartmentalize and it’s managed by the NAA.

You’ll be able to speak with the top apartment and rental housing professionals in the industry, along with apartment builders, property managers, and financiers and thus make a much better investment decision. Prices are rising fast and the best properties are being bought up. It’s only a few week away so make sure you register and plan your trip.

Apartmentalize in Denver

The bustle and optimism around Denver’s economic success will ensure better than average attendance at major trade shows such as NAA Apartmentalize.  Last year’s event in San Diego drew 9,000 attendees and 500 exhibitors.

The ManageCasa team will be attending the Apartmentalize event so please drop by and discuss property management with us.

If buying a condo or apartment as an investment property is in your future plans, you’ll learn plenty at the Denver show in late June. Plan a vacation. Catch a MLB baseball game at Coor’s field and take a drive into the Rocky Mountains. Colorado is beautiful in summer!  The perfect family vacation.

The Denver Apartmentalize event is a 3 day expo offering interesting educational seminars on the property rental market, such as: Rentonomics 101: Understanding Trends That Are Powering the Future of Renting, and Futurecasting: Where is Technology Taking Rental Housing Next?

Denver Apartment Rental Market 2019

First quarter stats are in and vacancy rates have fallen with prices rising. The rental vacancy rate rate dropped half a percent to 5.4%. Rents rose to $1480 per month according to the Denver Metro Apartment Vacancy and Rent report for 1st quarter of 2019.

Graphic Courtesy of Multihousingnews.com

With vacancy rates dropping and home prices expected to rise this summer, there will be upward pressure on apartment rental rates. It’s reported that rent prices have risen 5% per year for the past 11 years, far above wage gains. Rent’s rose 4.2% in the 1st quarter alone.

According to Rentcafe.com, average rents rose $67 year over year, while nationally they rose only $15. RentCafe shows the neighborhoods of Congress Park ($2280/mo), Cherry Creek ($2184/mo), LoDo (2131/mo), Cheesman Park ($2084/mo), Country Club ($2084/mo) and downtown Denver ($2062/mo) as the priciest rental markets.
The most affordable Denver rental markets were Westwood ($943/mo), Mar Lee ($943/mo) and Barnum ($943/mo). From there, rental prices across Denver rise fast. During 2018, a flat year, rents still rose 6.2%.

Reports also have it that construction spending will be well down this year putting more pressure on current apartment stock.

Tips for Buying Investment Property in Denver

It’s a great investment market for homes and apartments in Denver this year, but let’s not get too impulsive. With a little strategy, information and smart buying tactics, you might find a property that offers amazing ROI. When you hand your property over to your property manager, they’ll have an easier time helping you earn higher returns.

  1. Hire a Denver Realtor and Property Manager – A Realtor’s knowledge of the market is vital to avoid buying a lower quality investment property and to understand which neighborhoods have the right renter demographics for continuous demand. A Denver property manager can ease your workload if you’re buying many investment properties.
  2. Get Pre-approved for Financing. With funding issues out of the way, buyers will prefer to work with you, you can negotiate better and perhaps get your offer accepted right away.
  3. Get educated on Denver’s Neighborhoods. Understand why renters want to live there. Distance to BDC, transit, and parks are important to renters. Parks, shopping, building amenities, technology, and other assets draw and keep loyal tenants. Your property manager might be talented, but the property underscores the value the renter pays for.
  4. Choose the Best Property for You. It might be several multifamily units, a small apartment building, or several single detached homes. Make sure it’s turnkey property and ready to rent. Talk with the neighbors and the landlord if any. The top issue is about how easy it will be to maintain or repair, and whether emergency expenses might appear, and whether you can handle rent controls, HOA fees and other restrictions and costs.
  5. Do a Pro Forma Analysis and Calculate your Long Term ROI. Calculate capital appreciation, taxes, fees, interest, yearly rental income growth and ensure the numbers make sense. Of course, be skeptical of your own calculations as they’re often rosy.

Denver has one of the better real estate market forecasts for 2019. Contrast it with the Phoenix housing market forecast, Las Vegas Housing Market , Hawaii housing market forecast, and Los Angeles housing market outlook, and you’ll see Denver is perhaps more accessible for investors.

And the lifestyle benefits shouldn’t be ignored. Colorado’s tourism market, summer or winter is a big draw that helps stabilize it against wild swings.

Good luck with your investment in Denver properties. We’re looking forward to seeing you June 28th in Denver at the Colorado Convention Center!

 

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