What Do We Know About the Denver Real Estate Market
The Denver real estate market has experienced significant change in recent years for both buyers and sellers. Inventory for single-family, multi-family, luxury, and rentable properties has dropped to rates lower than the market has ever seen, leading to bidding wars amongst buyers and large payouts for sellers. Beyond just inventory, though, there are several factors at play that have influenced the market. Below, take a look at these Denver real estate trends to help you make an educated decision.
Trends for Real Estate Buyers in the Denver Area
Whether you are an experienced homebuyer or looking to purchase your first home, it is important to learn as much as possible about Denver real estate trends as you begin your searching process. These factors have each had a significant impact on real estate in Denver:
The COVID pandemic has impacted nearly every industry around the globe, and the real estate market is no exception. As 5280 Denver’s Mile High Magazine put it, “COVID-19 created market factors like we’ve never seen before, driving people to consider emotional needs, along with financial ones.” As COVID caused people to spend more time indoors both in work-from-home positions and mandated lockdowns, it became increasingly important for homebuyers to find the ideal location, size, and “feel” of a home. More than ever, homebuyers began basing the purchase decision on wellness factors instead of only monetary factors. This led to an increase in purchases at price points that may not have been previously considered pre-COVID, resulting in an exceptionally competitive market.
Increasing Home Prices in a Seller’s Market
As discussed above, Denver homebuyers have been willing to pay higher prices to find a property that fits with their lifestyle and overall needs, while the inventory of available homes has lessened. The market has thus become a hot seller’s market, with prices rising at rates even faster than usual seasonal trends. This year’s seller’s market has lasted far beyond seasonal norms, and according to a recent Denver Metro Association of Realtors (DMAR) report, homes are being sold at far beyond listing price with many properties going into bidding wars.
High Quality of Life in Denver
Despite the increasing prices and competition, homeowners are still heading to Denver in droves. The high quality of life in Denver appeals to families and individuals alike. Denver boasts high rates of sunshine throughout the year, access to the mountains and other beautiful nature sites, and a high median income compared to the cost of living.
Declining Listings = Fewer Homes on the Market
The increase in emotional factors driving the homebuying process combined with the high quality of life offered in Denver means that homes have been flying off the market. The result is, of course, a market that consists of very low inventory. According to DMAR, this October was the lowest October in history in terms of Denver housing inventory. In fact, there was less than a month’s worth of inventory on the market in October.
Trends for Real Estate Sellers in the Area
If you’re a real estate agent in the area, these Denver real estate trends will help guide you as you navigate your career. Take a look at the list below to learn more.
Higher Likelihood of Homeowners to Settle Down in Denver
With the high quality of life in Denver, it is no wonder that homeowners are more likely to settle down in Denver than other major cities. According to the rankings from U.S. News, Denver is ranked Number 14 on the list of Best Places to Live in the U.S. in 2021-2022. A strong job market in Denver increases its desirability amongst young families who are searching for homes, making them more likely to settle down long-term.
Strong Economy Brings Faster Growth—And Better Odds for Selling
As discussed above, Denver is a popular choice for homeowners due to the high quality of life and strong job market. The strong economy brings with it faster growth and better odds for selling. Furthermore, interest rates for mortgages were low in 2021, which also encouraged more people to buy despite the competitive market. For agents in the Denver real estate market, the situation is well-aligned to encourage sales.
More Affordable Homes Sell Faster
Though rising prices are the current trend in Denver real estate, it is no secret that more affordable homes sell faster on the market as a general trend. Real estate agents may need to actively sift and search through the market in search of homes that are still being sold for an attainable price. Luckily, we at redT make this search easier. To help combat the inventory shortage, redT is actively working to add healthy, new construction properties to the market at attainable price points that are actually feasible for the average homebuyer in Denver to purchase.
Steady Rates of Appreciation
According to DMAR, home values in Denver and the surrounding areas have risen in value by more than 20% in the last 12 months. Both DMAR and the home-listing platform Zillow predict values to rise another 19.5% in the next 12 months as well. With these steady rates of appreciation, homeowners are eager to get on the market despite the competitive seller’s market. As a real estate agent, you are in a position to help people invest their money into the perfect home.
The Higher Cost of Rent in Denver
To further spur the hot seller’s market in Denver, there is also a similar lack of inventory and rising prices for rental properties on the market. Though serial renters who are not used to making large purchases would usually be hesitant about buying in the current market, they are increasingly taking the jump to buy. This is because for-sale homes and rental properties are experiencing a similar shortage of availability in the Denver real estate market, and rental prices are rising to levels never seen before. Rather than continuing to rent with no return on the investment, many of these renters are finally making the jump to homeownership.
What it Means for Real Estate Construction
The real estate market in Denver is in desperate need of new inventory. If you are a real estate developer in Denver, now is the time to build, build, build in order to alleviate the inventory problems. However, along with a general lack of inventory, there are even fewer healthy, sustainable homes available for homeowners. This is why redT is focusing on building and developing new construction properties that are healthy for homeowners and for the environment.
The Push for Sustainability
The push for sustainability in the real estate development industry is changing the way people design and build new construction homes. The construction industry has been one of the leading exacerbators of greenhouse gas emissions, and green building techniques are becoming more necessary and desirable as the industry progresses towards the future. Moreover, homes constructed to eco-friendly standards spend fewer days on the market, have fewer days of vacancy, and receive higher valuations.
Supply and Demand for Materials
Sustainable building techniques are also becoming a necessary component in real estate construction due to supply and demand issues for construction materials. The demand for construction materials is far higher than the material availability, and COVID-19 has only exacerbated this process. As a result, many home builders and real estate developers are turning to greener materials and green building techniques that require less material use and waste.
Understand the Market to Make an Educated Real Estate Decision
Whether you are a homebuyer, renter, real estate agent, or real estate developer, it is important to understand the latest Denver real estate trends. More than ever, homebuyers are considering wellness, health, and sustainability as primary factors in their decision-making process. Because of this focus on quality of life, more people are interested in buying homes in Denver than ever before. As real estate developers, the time has come to prioritize building more homes—and building them to a higher standard.
A new home in Denver is within your reach. Contact us today!