In June and July we continued to see home prices increase across the Denver Metro area. The average price in June for Metro Denver was $454,547.00 according to the Denver Business Journal. The year-over-year increase in the average home price is approximately 8%. While the year-to-date increase in the average price a home in metro Denver was around 7.79%.
This of course is great news for those of you who continue to add equity in your properties. Home values increase year after year. Without any major rate increases or increases in supply this is predicted to continue for the next couple of years. Most industry experts agree that Denver will continue to grow over the next few years, with more and more people moving to the Denver metro area attracted by the quality of life provided, the mild weather, access to the mountains for summer and winter activates, and the availability of work. Denver continues to lead the country with one of the lowest unemployment rates.
Residential real estate isn’t the only thriving industry, commercial and industrial real estate continues to be strong for the Denver Metro area as well. This is a good sign for a strong overall economy of our state and as more and more foreign investors take notice of Denver and its opportunities. The increase in direct international flights from DIA is also a positive factor in our overall growth and attractiveness of the Denver Metro Area to foreign investment. According to Pete Schippits, senior managing director at CBRE, when interviews by the Denver Business Journal said that they have started to see more foreign investment from countries like Germany, Sweden, Bahrain, and South Korea, not to the levels of the coastal cities but close. He believes the investors are attracted by the diversified nature of Denver, the in-migration, the millennials, the workforce, low unemployment, and other fundamentals that look promising for our city and state.
The other area of growth that is promising is the condo/townhome market which should soon pick up speed as new legislation on the condo defect laws takes place. This should encourage more developers to start building condos instead of luxury rental units. This should help ease some of the overwhelming demand for residential housing in the City of Denver. This does not mean that prices for condos or townhomes in the Denver Metro area are going to drop, it just means that prices should level off some, allow more buyers to get into the market.
The overall outlook for the Denver Metro area is very positive and home investment continues to be a good place to see strong returns. The Denver Metro Area does have some challenges that will need to be addressed in order to continue to sustain the growth we are seeing, such as diversified infrastructure for mass transit, industries must continue to address the increasing cost of living, and affordable housing must be addressed on a larger scale.
As always as you are contemplating our unique market and wondering what options may be best for you, please feel free to reach out. I am always happy to answer any questions you have or point you in the right direction.