Companies Moving to Denver and How it Changes our Real Estate Market
In comparison to 2015, we saw a decrease of around approximately 2% in the number of active listings on the market this year. This was a big contributing factor to the feeding frenzy that was seen in the spring of this year, where most homes in the $400,000 and below range were seeing multiple offers well over the asking price. Things did settle down some coming into June and July and we saw a slight market correction with prices leveling out some and more active listings coming online. Even with builders bringing more inventory online it still is not enough to meet demand especially in the lower price ranges.
We did see a slight decrease in rental prices due to more inventory coming online which allowed renters some relief. It still remains cheaper in most cases, however to buy then rent, especially in Denver.
The average sold price for 2016 has increased around 12% from 2015 prices for both single family and attached homes. This is great news for those of you who became home owners in 2015 and early 2016. The average sold price for a single family home in Denver is approximately $435,000.00 according to RE-Colorado and approximately $287,000.00 for condos.
In summary 2016 was another year of record growth for the Denver Metro Real Estate market. More and more people are taking notice of the opportunities and lifestyle benefits Colorado has to offer. Companies are taking notice of the educated work force that is available in Denver. Another leading factor that contributed to a record year was the continuation of record low interest rates, which kept many homes still within the range of buyers.
Looking forward to 2017 things continue to look positive for Denver. News that companies like BP (British Petroleum) are moving approximately 200 new jobs to Denver, is just a reminder that we are going to continue to see population growth in the coming year. Builders are also taking notice of the 45+ cranes around Denver proclaim the continued development going on in our city. As I have said before builders will eventually start to put a dent in the demand for new homes, but it is still a few years away before they can catch up with our growth. While demand should continue to keep our market strong, there is once again predictions of increases in interest rates this year. There is a very good possibility we will finally see interest rates increase this year and this will impact buyers. With every increase a person’s buying power decreases. This is some thought that this may slow our home price increases for this year as the market will have to adjust to the increase in costs. I see this being true for the areas of Denver that have reached prices well above the $450,000 mark, however I think home prices under $350,000 will still see increases in the coming year.
All in all Denver still remains a strong market to invest in and should remain so for the foreseeable future. It is also an excellent market to sell in as inventory is still at an all-time low and is not predicted to increase much this coming year.
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