Denver Real Estate News November 2016
The month of November found us with unseasonably warm weather and a slightly cooler real estate market.
October into November saw a decrease in the number of new and active listings in comparison with October, 2015. The reason for this I believe is the political uncertainty that comes with a presidential election year. While our country adjust to the impending policy changes I think you will see some slight market adjustments, however I do think the Denver metro area will continue to see strong growth, as our pollution is predicted to continue on a strong growth pattern. We not only have people moving in from other areas of the country, but we also have a large demographic of young people moving out from their parents’ home or finally transitioning from having roommates to a home of their own. With the median age in the Denver area being approximately 36 years old this is huge demographic of new home owners just starting to get into the market place.
A concern that clients have voiced to me is in regards to all the new development going on around the Denver Metro area and whether or not we will end up with an oversupply. An oversupply is not in the near future, as the current project nearing completion and those already completed are not enough to meet the demand in the ever growing Denver Market. While eventually we should reach some stability in supply which should see the market level off, it may be a few years down the road before we see this start to happen.
Another comment I hear from people is about the median home price in Denver metro area, which is $345,000.00 according to the ReColorado Monthly Snapshot. This price is getting out of reach for many first time home buyers. While this is a concern and I see it with many of the first time home buyers I work with it is important to keep in mind that it is still far less expensive than many other areas of the country like California or New York. This is also an attractive state to many businesses around the country because the overall cost of commercial real estate and cost of living is significantly lower than areas like California and New York. We also have one of the most highly educated group of individuals to fill those job opportunities. This comes together to create a perfect storm for population growth. More and more people are moving to places that offer a quality of living and the jobs are coming to them. In the past people have more often moved to the jobs.
So what do first time home buyers do if they are not moving from a more expensive state? Well that is where we are seeing the townhome and condos being absorbed at a fast pace. Condos and townhomes are a great way to get your foot in the door as a fist time home buyer in the Denver Market. The best news is that we are seeing the highest appreciation rates in this sector because of this making it a great investment for first time home buyers. They can later use the equity acquired to get into a single family property a few years down the road, or hold on to the condo as a rental and use the rental income to offset the cost of buying another home down the road. There are a myriad of options to consider as a first time home buyer so do not get discouraged, you can make this market work for you too.
What does this all mean for you? Well it means that even in an uncertain political climate Colorado will continue to be a great state to invest in Real Estate. There are a range of opportunities for people depending upon what there end goals are. For example if you are trying to diversify investments and want to get in to the rental market the population growth ensures continued low vacancy rates and a pool of renters. If you are looking at selling your home and want to upgrade into something bigger or move into that area you have had your eye on, this is still a great time to sell. If you are looking to buy, you can rest assured this market will continue to grow over the next few years.
Of course it is always important to look at your individual financial goals before you make an investment and I am happy to sit down and talk to you about real estate if this is something you are considering.
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