The Denver real estate market has been on fire since 2014. Consistently showing up in national rankings as one of the top three hottest markets, Denver continues to gain national attention for its unbridled growth. It seems that with big growth comes big price increases. Skyrocketing prices have left people wondering if we are the next California, with home ownership out of reach for many average Coloradans.
Each year home prices have been increasing up to ten percent, and sometimes more in the hot spots of the metro area. Around June we typically see the highest prices of the year, before they start pulling back with the onset of Fall. This past Spring we saw the median price of a detached single family home hit $430,000.
Still A Seller’s Market?
Looking at the past statistics and trends, a distinct sales pattern appears. Going back to 2014, we see a hefty spike in list prices every January. A new year with new, higher costs have been the norm. Every year is a stair step up to a new level of increased home values. Will 2018 follow the same trend? Based on the current trends, it probably will.
A lot of agents today are talking about a shift in the market. It doesn’t seem like the market is as tough for the buyer as it has been over the last couple of years. Homes are sitting a little longer on the market, buyers have a little more negotiating power, and there have been more price reductions overall. But the changes are subtle. Trends for 2017 are carbon copies of 2016 and 2015. We’ve traveled this road before and without dramatic changes, we probably will again.
With that said, looking forward there is a difference. New homes are still being built en mass around the metro area. Builders are catching up with entire communities appearing out of empty fields. Plus, buyers are now finding more inventory as sellers are starting to feel more comfortable in selling and finding a replacement home. New listings in June were up 6% from the same time a year ago.
The other dramatic increase we have seen since 2014 has been the cost of rent. Would be home buyers were desperate to get out of their rentals to purchase a home, as rental rates skyrocketed. But even this is beginning to even out as new apartment complexes continue to appear. Landlords are starting to offer incentives such as “first month free” to keep their buildings full.
While the market may not be on fire as it has been in the past, it is still solid. Good properties are still getting multiple bids, but the less attractive ones are starting to sit. The shift in the market has been subtle, but it is beginning to make the move to a more normalized market. It’s still a good time to sell, but for buyers, the playing field is beginning to level.