The Metro Denver housing market remains consistently hot. October continued to defy the cooling trend of the winter season as new records were broken by both buyers and sellers. This trend is largely driven by low-interest rates. Denver and the entire metro area remains a seller’s real estate market, especially in the $300,000 to $399,000 price range where it's getting even more difficult for buyers to compete.
Denver Metro saw a 2.4% increase in the number of homes sold through the third quarter of 2020. The area was recently named the second-best city to live in the country by U.S. News and World Report. Residential $3,363,002,016 sales volume represents the highest October on record and the fourth-highest month of all time.
The previous high in October was in 2019 at $2,487,936,752. July of 2020 was the all-time record at $3,965,805,480. Detached homes are the preference for many homebuyers today. In the last month, there was a record-high for the average sales price for both single-family detached and attached properties at $625,100 and $393,733 respectively, according to the Denver Metro Association of Realtors.
The median closing price on a single-family home was $519,900 in October, an increase of 1.9% from September and 14.3% over the past year. The average closing price was $625,100, a 4.5% gain from September, and an 18% increase over the past year. October also saw a record-low of months of inventory at an astonishing 0.81.
The reason inventory is so tight is that sellers haven’t matched the enthusiasm buyers are showing in this pandemic. Active listings across both detached and attached single-family homes at the end of October 2020 stood at 4,821, a record low for October by nearly 2,000 listings. The number of active listings in metro Denver at the end of October was 4,821, a decline of 9% from September, and 43.7% from a year earlier.
The affordability crisis still exists in the Denver Metropolitan Area. The MSA recorded a 14.26% annual gain in the median price of a single-family detached home sold in October. Low mortgage rates help but don't eliminate, the risk that the housing market could still face an affordability crunch if home prices continue to rise at a rapid pace.
If the home prices continue to rise at this rate, many buyers would be priced out of the market. The effect of lower mortgage rates (for buyers) is being evened out by the rate of real estate appreciation. In October 2019, the median price of a single-family home sold in metro Denver was $456,000, according to DMAR. And the average interest rate on a 30-year mortgage was around 3.58%, according to Freddie Mac.
Assuming a buyer provided a 10% down payment, the principal and interest payments on the mortgage would have been $1,861 a month. Contrast that with October 2020, where the median price of a single-family sold was $519,900 and 30-year mortgage rates average 2.78% (as of November 11, 2020).
A buyer faced a payment of $1,918, or $57 more a month than a year earlier. Assume that builders and sellers had met buyer demand, keeping prices flat over the year. Lower mortgage rates would have resulted in a monthly payment of $1,682, or a savings of $179 a month.
Not only Denver but the entire Colorado housing market is a hotspot to buy and sell real estate. Due to the surge in demand for homes, average prices for properties have increased in most regions throughout the state. In Colorado Springs, another popular market, the average home prices have reached $403,972. Denver housing market will continue to heat up in 2021 as shown in the forecast given below.
Metro Denver Housing Market Report (October 2020)
Below is the latest monthly report of the “Metro Denver housing market” from DMAR. Metropolitan Statistical Area (MSA) reports show housing market statistics that focus on the Denver metro region with a relatively high population density at its core and close economic ties throughout the area. Here are the numbers for October 2020 compared with October 2019.
- (Residential) 4,821 represents the lowest October on record. The previous low was in 2016 of 6,731.
- (Detached) 2,643 represents the lowest October on record. The previous low was in 2017 of 4,720.
- (Attached) 2,022 represents the highest October on record. The previous high was in 2019 at 1,657.
CLOSE PRICE — MEDIAN
- (Residential) $475,000 represents the highest amount on record and an increase of 12.80% YTY & 3.26% MTM.
- The previous record was $460,000 recorded in July, August, & September 2020.
- (Detached) $519,900 represents the highest amount on record and an increase of 14.26% from October 2019.
- The previous record was in September 2020 of $510,000.
- (Attached) $339,425 represents the highest amount on record and an increase of 9.85% from October 2019.
- The previous record was in September 2020 of $335,000.
CLOSE PRICE — AVERAGE
- (Residential) $561,999 represents the highest amount on record. The previous record was $540,890 recorded in July 2020.
- (Detached) $625,100 represents the highest amount on record. The previous record was in August 2020 of $602,264.
- (Attached) $393,733 represents the highest amount on record. The previous record was in September 2020 of $384,902.
- (Residential) 5,984 closed transactions represent the highest October on record and an increase of 16.33% from October 2019.
- The previous high was in 2019 at 5,144 sales.
- (Detached) 4,352 closed transactions represent the highest October on record and an increase of 17.34% from October 2019.
- The previous high was in 2019 of 3,709.
- (Attached) 1,639 closed transactions represent the highest October on record and an increase of 9.85% from October 2019.
- The previous high was in 2017 at 1,461.
- (Residential) 0.81 months represents the lowest number on record.
- The previous record low was in September 2020 of 0.91 months.
- (Detached) 0.61 months represents the lowest amount on record.
- The previous record was in September 2020 of 0.72 months.
Metro Denver Housing Market Report (September 2020)
Below is the monthly report of the “Metro Denver housing market” from REcolorado with numbers for September 2020 compared with September 2019. It includes Greater Denver Metro Area Counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park.
|In September more homes sold than any other September on record.|
|6,303 homes were sold, a year-over-year increase of 26% and a 4% decrease month over month.|
|Total pending sales were 6,341, which is 26% more than September 2019 and 10% less than last month.|
|The average price of a home in the Denver metro area in September was $538,376, a year-over-year increase of 12%.|
|As compared to August, home prices saw a marginal increase.|
|Single-family residences were sold for an average price of $598,875, a 13% year-over-year increase.|
|The average price of multi-family/ condos/townhomes was $385,367, up 8% year over year.|
|6,563 new listings of homes for sale hit the market, which is 9% higher than September of 2019 & a decrease of 5% from last month.|
|At the end of September, there were only 5,159 Active properties on the market, 46% fewer than last year at this time, and 11% lower than last month.|
|Currently, there are 4 weeks of inventory, 5 weeks fewer than this time last year, and unchanged from last month.|
|Denver Metro homes spent an average of 23 days on the market in September, 10 days fewer than this time last year and unchanged from last month.|
Denver Real Estate Market Forecast 2021
What are the Denver real estate market predictions for 2021? Let us look at the home price appreciation trends recorded by Zillow over the past few years. Since 2012, the Denver home values have increased from $230,000 to $466,601, an increase of 103%.
Denver's strong economy gives buyers the ability to spend more on housing, consequently increasing real estate prices. Home values rose so much over the past six or seven years that affordability became an issue for a person earning the median income in this area. But in 2019, it clearly experienced a cooling trend where home values appreciated by a mere 1%.
The year ended with an average home price of $486,695 and a median of $420,000. This was up less than three percent from 2018, but up almost 90 percent from 2010.
As of now, the Zillow Buyer-Seller Index (BSI) shows that Denver is currently the seller's real estate market which means that demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the marketplace.
Similar growth has been recorded by NeighborhoodScout.com as their data also shows that in the past ten years the Denver real estate appreciated by 107.91%. This amounts to an annual real estate appreciation of 7.59%, which puts Denver in the top 10% nationally for real estate appreciation.
During the latest twelve months alone, the Denver appreciation rate has been 3.26%, and in the latest quarter, the appreciation rate has been 0.92%, which annualizes to a rate of 3.75%. This figure also corroborates with Zillow's positive forecast, so the home prices in this region are expected to increase by at least 3-6% in the next twelve months.
Currently, the typical value of homes in Denver is $466,601. The typical value of homes in Denver County is $467,728. The typical value of homes in the Denver-Aurora-Lakewood Metro is $462,724. These values (by Zillow) are seasonally adjusted and only include the middle price tier of homes.
Here is the latest housing forecast for Denver, Denver County, and Denver MSA until September of 2021.
- Denver home values have gone up 3.7% over the past year and the latest forecast is that they will rise 6.4% in the next year.
- Denver County home values have gone up 3.7% over the past year and the latest forecast is that they will rise 6.4% in the next year.
- Denver-Aurora-Lakewood Metro home values have gone up 5.3% over the past year and Zillow predicts they will rise 5.4% in the next twelve months.
The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until September 2021.
Here is another short and crisp Denver housing market forecast by “LittleBigHomes.com” for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Denver is 76% and it is predicting a positive trend.
They estimate that the probability of rising home prices in Denver is 76% during this period. If this price forecast is correct, the Denver-Aurora-Lakewood, CO home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
The historical change in home prices for Denver-Aurora-Lakewood, CO is shown below for the three-time period. The Denver Home Price Index has increased for the last 26 consecutive quarters (data up to 3rd Quarter, 2018). The highest annual change in the value of houses in the Denver Real Estate Market was 29% in the twelve months ended with the 2nd Quarter of 1978.
The worst annual change in home values in the Denver Market was -4% in the twelve months ended with the 4th Quarter of 1987. The historical change in home values has been calculated until the 3rd Quarter of 2018.
|Time Period||Metro Denver Real Estate Appreciation|
|Last 5 Years||67%|
|Last 10 Years||83%|
|Last 20 Years||179%|
The question is whether it is going to remain a sizzling real estate market amid the ongoing Coronavirus pandemic? In conclusion, we can say that these numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the ongoing pandemic has not had any major impact on Denver’s housing market.
Home sales have created new records in September & October. According to local brokers, the sales could have been even more if they weren't short of supply. Such is the buyer demand in the Metro Denver housing market. Buyers looking to purchase a detached single-family home have to struggle because there are fewer homes for sale.
The active listings at month-end statistics showed that there were 46% fewer properties for sale year over the past year. As long as buyer demand continues to outpace supply, we will see prices go up. The median closing price on a single-family home was $519,900 in October, an increase of 1.9% from September and 14.3% from October. The average closing price was $625,100, a 4.5% gain from September, and an 18% increase over the past year.
Condo prices are also surging due to competition. The median price of a condo or townhome sold was $339,425, an increase of 1.32% from September and 9.85% from October 2019. The number of homes and condos sold in metro Denver in October fell 7.1% from September but remains up 16.3% for the year.
On average, buyers paid more than the full asking price for detached homes and nearly full price for attached homes. There was not a lot of room for negotiations when multiple buyers were competing for the same home. The effect of lower mortgage rates (for buyers) is being evened out by the rate of real estate appreciation.
Low mortgage rates can only help buyers if prices remain flat this year. Otherwise, their monthly payments will increase even though the mortgage rate has dropped to 2.91%.
Denver Metro Area is still a strong seller’s market across the board except but the historically low mortgage interest rates are helping buyers as far as housing affordability is concerned. Extremely low amounts of inventory are helping sellers to move their properties quickly in the $300,000 to $399,000 price range.
Furthermore, the Classic Market segment continues to sell for remarkably high percentages of the list price. The average days on market is decreasing month to month, year over year, and year to date.
In a balanced real estate market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, Denver can become a buyer's real estate market if the supply increases to more than six months of inventory. And that’s not going to happen soon. Months Supply of Inventory in the metro Denver housing market has dropped to 4 weeks, which is very low. Less inventory means home sellers have more power.
Therefore, in the long term, the Metro Denver real estate market remains strong and skewed to sellers, due to persistent imbalance in supply and demand. The only segment of the market in which homebuyers have the edge are condos priced over $1 million. Nationally, the houisng market is breaking all the records despite the COVID-19 pandemic. The real estate sector has been one of the most resilient areas of the economy during the severe economic shutdown.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Denver in 2020 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Denver Housing Market 2020: Prices And Trends (YTD Summary)
Let’s discuss a bit about Denver and do a quick recap of how its housing market has performed in 2020 so far. We shall mainly discuss median home prices, inventory, economy, growth, and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Denver was ranked as the country's 16th-most walkable city, with 600,158 residents. It has some public transportation and is very bikeable. Downtown is the most walkable neighborhood in Denver with a Walk Score of 93. Due to the low month’s supply of inventory, the Denver housing market is persistently skewed to sellers – which means that the demand from buyers is always exceeding the current supply of homes for sale.
As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached are the most common housing units in Denver. Other types of housing that are prevalent in Denver include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 40-45% of Denver's housing units.
The year 2020 began very much still in favor of sellers for the Denver Housing Market. By the end of 2020, the house prices in Denver were expected to rise by 2 to 3 percent, which meant it was likely to be another year of affordability crisis for buyers. The residential real estate market in Denver continues to churn unimpeded even in the times of COVID-19.
In January 2020, we saw a massive gain in the inventory in the Denver metro housing market. New listings increased by a massive 89.27 percent from the month prior. Active listings dropped by a 1.91 percent drop from December because home buyers placed 43 percent more homes in pending status month over month which diminished the housing inventory surplus.
In the entire residential market, there was a 34.21 percent drop in the number of closed homes and a 35.19 percent drop in sales volume month over month in January which was a reflection of the lower end of 2019. As usually occurs this time of year, the days on the market were longer, averaging out to 45 compared to 41 in December. The average single-family home price was down from its summer highs, but higher year over year by 6.86 percent to $532,494.
The picture is a little different for condos that experienced a 4.98 percent month-over-month drop in average price to $355,754, which is also down 0.37 percent from the same month last year; representing the first price drop in January in at least the past four years. After a remaining almost flat throughout 2019, with a mere 1% rise in prices, the Denver housing market was showing little signs of gains.
In March 2o20, the Denver Metro housing market was showing signs of being one of the best on record. However, amid fears stemming from the ongoing pandemic, there were an unprecedented 761 home sellers that withdrew their homes from the metro-Denver real estate market in March.
The largest number of homes, 625, was removed in the last two weeks of March. All price ranges in the Denver metro area were still signs of a warm seller’s market. In March, 30.24% more new listings came on the market, which pushed the number of active listings at month’s end up 19.46 percent to 5,776. Notably, that is 8.20 percent fewer active listings than March 2019.
Homes in the Denver housing market were selling at an average of 29 days. The trend for average days on the market had gone down since last month. The number of pending contracts increased by 8.03% MTM, and there were 12.02% more homes sold. In March 2020, the average sale price for all residential single-family homes (attached plus detached) was $513,526, up 7.31% since March 2019 – setting a new record high.
It was also the first time the average sale price for both single-family homes and condos topped the half-million-dollar mark. The highest number of sales were in the $500,000 to $749,000 range.
Impact of COVID-19 on the Denver Housing Market
Despite the pandemic, home prices going up. According to Dmarealtors.com, in March, pre-COVID-19, the average price for a residential property in the 11-county metro Denver area zoomed above $500,000 for the first time, to $513,535. That price then dipped back down below the half-million-dollar mark during the home-showing shutdown and uncertain economic times in April and May.
In April, the median sales price of all residential properties increased by 2.56 percent to $400,000. The dollar volume of all home sales in April was around $1.8 Billion, a year-over-year decrease of 29.7%. There remained about a month's supply of residential single-family homes (attached plus detached) in the price range of $300,000 to $499,999. (We are mainly going to focus on this housing market segment).
Furthermore, the Classic Market segment continued to sell for remarkably high percentages of the list price. In April 2020, the average sales price for the attached properties was $370,011, a 0.22 percent increase over April 2019. The average sales price for detached properties increasing by 1.97 percent since April 2019.
The average sales price of all properties (attached plus detached) was $400,232, a 1.45 per-cent higher than last April. April 2020 finished with a 100.50 percent close-price-to-list-price ratio for combined residential, a small increase over March, and a nearly half percent increase year over year.
In the Denver Metro Area this May, 3,437 homes closed, a year-over-year decrease of 44%. As compared to last month, sales saw a 13% decrease. In May, the count of listings in Pending status was 6,935, which is 119% more than last month and up 14%, from May 2019. Extremely low amounts of inventory helped sellers to move their properties quickly in the $300,000 to $399,000 price range.
The average price of a home in the Denver metro area was $502,441, a year-over-year increase of less than 1%. Compared to April, there was also an increase of less than 1%. Single-family residences sold for an average price of $542,479, down 2% year over year.
The price of multi-family and condos was up 4% from May 2019, at an average of $394,670. At the end of May, there were about 2.1-months (9 weeks) of inventory on the market, two weeks more than last month, and three weeks more than last year.
According to REcolorado's (state's largest network of real estate professionals) June 2020 report, the average price of a home in the Denver metro area was $508,951, a year-over-year increase of 2%. Compared to last month, there was an increase of 3%. 5,992 homes were closed, a year-over-year increase of 3%.
As compared to last month, sales saw a 69% increase. Single-family residences sold for an average price of $559,290, an increase of 2% year over year. The price of multi-family/ condos/townhomes was up 1% from June 2019, at an average of $370,180.
According to their July 2020 report, the average price of a home in the Denver metro area in July was $539,340, a year-over-year increase of 9%. As compared to last month, prices were 6% higher. A record number of homes sold in the Denver Metro area. Throughout the month, 7,186 homes closed a year-over-year increase of 21% and a 16% increase month over month. Single-family residences sold for an average price of $599,463, a 10% year-over-year increase.
The average price of multi-family/ condos/townhomes was $383,764, up 6% year over year. There was a record number of homes sold in the month of August as compared to this month in previous years. July 2020 had hit a record high number of home sales in any given month in the Metro Denver real estate market. As compared to July, home sales dropped by 13% in August. However, home sales increased by 12% year-over-year, as reported by REcolorado®.
Several key housing indicators showed year-over-year gains as more buyers entered the market in August. The factors driving prices up are an increase in demand for housing, tight inventory, and record-low mortgage rates. The average price of a home in the Denver metro area in August was $539,252, a year-over-year increase of 11%.
As compared to July, prices saw a marginal increase. Home price increases were driven by Single-family residences, which sold for an average price of $602,191, a 13% year-over-year increase. This is the first time prices for single-family homes have surpassed $600,000.
New listings in August were 5.88% lower than this time last year where year-to-date new listings are down by 9.85%. The closed to list price ratio for all residential properties in this segment was 100,74%.
Denver Real Estate Foreclosure Statistics
Here are some foreclosure statistics of Denver, CO. Colorado has had the lowest rate of mortgage delinquencies in any state of the United States. Combined with rising home prices, a strong economy, and a robust job market, these factors have all helped keep a lid on mortgage delinquencies – “Black Knight.”
According to Zillow's data, in Denver 0.2 homes are foreclosed (per 10,000). This is greater than the Denver-Aurora-Lakewood Metro value of 0.1 and also lower than the national value of 1.2. The percent of delinquent mortgages in Denver is 0.4%, which is lower than the national value of 1.1%. The percent of Denver homeowners underwater on their mortgage is 4.7%, which is higher than Denver-Aurora-Lakewood Metro at 3.9%.
There are currently 272 properties in Denver, CO that are in some stage of foreclosure (default, auction, or bank-owned) while the number of homes listed for sale on RealtyTrac is 320. In August, the number of properties that received a foreclosure filing in Denver, CO was 25% lower than the previous month and 89% lower than the same time last year.
Currently, in Denver, the zip code with the highest foreclosure rate is 80224, where 1 in every 8751 housing units is foreclosed. So, you’d find a lot of distressed sellers in this area and get some discounted off-market deals. 80222 zip code has the lowest foreclosure rate, where 1 in every 11068 housing units becomes delinquent.
|Potential Foreclosures in Denver||272 (RealtyTrac)|
|Homes for Sale in Denver||320|
|Median List Price||$399,999 (0% drop vs July 2019)|
Denver Real Estate Market: Is It A Good Place For Investment?
Should you consider Denver real estate investment? Many real estate investors have asked themselves if buying a property in Denver is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2020. Of greater importance to real estate investors in Denver is that the area is growing in population.
The jobs are increasing and so are the number of renters. It is the largest and capital city of Colorado, home to roughly 700,000 people. The Denver metropolitan area is home to around 2.7 million people. The population has increased by 1.33% from 2019. The Denver-Aurora, Colorado statistical area is home to about three and a half million people.
It has a low unemployment rate of 2.3% as of Dec 2019, according to the U.S. Bureau of Labor Statistics. A third of the population of the Denver-metro area rents. All these are excellent signs of investors looking to buy a rental property in Denver. Despite recent cooling off, there are several reasons to consider long term investment in the Denver real estate market. Shortage of housing for a growing population, a strong economy & increasing jobs have been fueling the demand in the Denver housing market for the past many years.
Denver is a key trade point for the country, and home to several large corporations in the central United States. It was named 6th on Forbes Magazine’s “Best Places for Business and Careers.” Denver South is home to 7 Fortune 500 companies. It is also home to mining and energy companies such as Halliburton, Smith International, Newmont Mining, and Noble Energy.
Let’s take a look at the number of positive things going on in the Denver real estate market which can help investors who are keen to buy an investment property in this city. We’ll address the biggest factor pulling people to the Denver housing market next.
Denver's Limited Room to Grow
Many of the fastest-growing markets in the US are along the Front Range, a part of the Southern Rocky Mountains. While there are houses in the hills, it is a lot harder to build on the mountainous landscape than on flat plains. In Denver’s case, the massive national forests and Rocky Mountain Park to the west of Denver and its suburbs prevent the expansion of the Denver housing market in that direction. This keeps home prices higher than they’d be in places like Dallas.
The residential median home price in Denver hovers around $475,000 as of October 2020. That’s a steal for the migrants from California, but the sheer numbers of them coming in is pricing locals out of the housing market. The median monthly rent here – and that includes one-bedroom apartments – is around $1100 a month.
Note that you could get much more for a spacious single-family home for rent or large condo. With a 3 bedroom detached single-family home, you could receive well over $2000 per month in rent. You’ll find strong ROI numbers for the Denver real estate market.
Denver's Quality of Life
We can joke about the people who moved to Colorado decades ago, inspired by the movie “Rocky Mountain High”. We’re not going to joke about the over-hyped medical marijuana industry there today. However, U.S. News and World Report listed Denver as the third best place to live in the US, while it ranked the 37th best place to retire.
The area was a little lower on value than many like, but it ranked high on jobs, quality of life, and desirability. It is a beautiful city to live near the mountains – located on the western edge of the exquisitely beautiful High Plains. It is exactly one mile high above sea level and has the largest city park system in the nation, with 14,000 acres of mountain parks and 2,500 acres of natural areas.
That isn’t enough on its own to draw huge numbers of people to the Denver real estate market, but it is a factor. It has become the 19th-most populous city in the nation. The current metro area population of Denver in 2020 is 2,827,000, a 1.33% increase from 2019 (Macrotrends.net).
Denver was ranked as a Beta world city by the Globalization and World Cities Research Network. It has been one of the fastest-growing major cities in the United States, and real estate investments provide a direct way to participate in the strong growth of these economies. The strength of the overall economy significantly impacts the real estate market.
Denver's Strong Economy & Jobs Boost Its Real Estate Market
Job growth directly affects the real estate market. Demand for all types of real estate increases with the number of local jobs, as during periods of economic development or boom. Jobs are a major reason why people move to Denver in the first place. The Denver area’s unemployment rate is less than 3%.
Denver’s unemployment rate has been well below the national average for years. The unemployment rate was 2.3% as of Dec 2019, according to the U.S. Bureau of Labor Statistics. The average weekly wages for all industries in Denver Area are $1,265 (the U.S. = $1,093). That explains why Denver is one of the top cities for in-migration, attracting people from all over the state as well as the country.
Due to its proximity to the mineral-rich Rocky Mountains, Denver has long been a home for mining and energy companies such as Halliburton, Smith International, Newmont Mining, and Noble Energy. The top 25 employers in Metro Denver include government and municipal organizations, and corporations.
Denver Technological Center, better known as The Denver Tech Center or DTC, is a business and economic trading center located in Colorado in the southeastern portion of the Denver Metropolitan Area, within portions of the cities of Denver and Greenwood Village.
It is home to several major businesses and corporations. The U.S. Government is the largest employer in Metro Denver. The Department of the Interior includes such agencies as the Bureau of Land Management, Office of Surface Mining and Reclamation, Bureau of Reclamation and all have offices in or near the Denver Metro area. Another top employer in the Denver Metro Area is the State of Colorado.
It employs nearly 30,000 people in the Denver Metro area. As the capital and largest city in the state, Denver hosts the State of Colorado in multiple locations. Centura Health is one of the top 25 employers for the metro Denver area. Its massive health care network includes 15 hospitals, eight affiliate hospitals, health neighborhoods, health at home, urgent care centers, emergency centers, mountain clinics, 100 plus physician practices, and clinics and Flight for Life Colorado.
Denver's The Strong Tourism Market
Denver is well known for its proximity to the Rockies. Other attractions in the area include but are not limited to the Denver Zoo and the Denver Botanic Gardens. Many of those 30 million tourists would love to have rented a house or apartment for their visit instead of a hotel. Then there’s the business traveler. Denver hosts around 80 conventions a year, too.
Whether someone is staying for a week for a convention or working a contract job in the tourism industry, this drives demand for short-term rentals that can be incredibly profitable. Renting on sites like Airbnb is legal if you have a business license, though around half of the Airbnb rentals are thought to be violating that rule. Denver is particularly progressive with allowing people to rent out their homes and apartments on Airbnb, though landlords may not agree with it.
Known Areas of Redevelopment
You don’t want to invest in the Denver housing market and end up losing money because the neighborhood is going downhill. Conversely, areas slated for redevelopment will almost certainly go up. And Denver has known and planned for areas of redevelopment. Downtown Denver saw multiple infill projects downtown ten years ago. Redevelopment is planned around Elitch Gardens today.
Key trade point for the country – Denver is home to several large corporations in the central United States. Denver South is home to 7 Fortune 500 companies. Denver was named 6th on Forbes Magazine’s “Best Places for Business and Careers.” Home for mining and energy companies such as Halliburton, Smith International, Newmont Mining, and Noble Energy.
Denver's Demographic Momentum
At first glance, the average age of 36 for residents versus 40 for the national average doesn’t sound too promising. However, this long-established city has already been noted as a great place to retire. That pulls the average age up. The coolness factor and job market attract equal numbers of young adults. That is why Millennials make up about 22% of Denver’s population.
And given the job market and quality of life, they’ll probably stay here to raise families, generating more demand for the Denver housing market. Generation X made that decision, too, which is why roughly a quarter of residents are under the age of 20. Additions to the local labor force tend to drive rents and prices up on properties in the vicinity and results in local construction of homes and apartments. That will propel the Denver real estate market for decades to come.
Denver Rental Market is Very Big
A third of the Denver-metro area rents. Since housing inventory is scarce, prices are going up much faster than wages, and the younger population is more comfortable renting than owning, the Denver housing market is seeing a rapid rise in its rental market. The sheer demand for housing stock is making it profitable to break up large homes into multiple apartments.
If Forbes could recommend this as a Denver real estate market investment strategy in 2016, it can be seriously considered today. They said that any single-family home in the Denver housing market could be considered a good rental property due to the rapid rise in home prices.
Denver Has A Large Student Population For Rental Homes. The college market presents a unique opportunity for landlords. There is a constant stream of people who will only rent unless they choose to stay after graduation. They may rent a while longer before feeling secure enough to buy a house.
Buying investment real estate in a college town is high-risk. After all, when a college like Evergreen State that scares off students or simply fails to attract them like many classics, private liberal arts schools who found themselves rendered redundant after brand name schools opened their doors, there’s less demand for the rental of the house as a permanent residence.
You don’t have that problem in Denver since there are so many colleges in the Denver area. Schools range from the massive community college network to the 400 student Bel-Rea Institute of Animal Technology. American Sentinel University in Aurora is home to 2600 students, while the Metropolitan State College of Denver has more than 20,000 students.
The Colorado School of Healing Arts has only 100 students, while Colorado Christian University has more than 7000. Yes, the Denver real estate market for those who want to cater to students is diverse. You could invest in rental real estate near any of these colleges, knowing you could rent or sell to people that simply want to live in the area if student demand slacks off.
Rental Trends: As of October 2020, the average rent for an apartment in Denver, CO is $1621 which is a 3.21% decrease from last year when the average rent was $1673, and a 1.23% decrease from last month when the average rent was $1641.
- One-bedroom apartments in Denver rent for $1429 a month on average (a 3.22% decrease from last year).
- Two-bedroom apartment rents average $1830 (a 1.97% decrease from last year).
- The average apartment rent over the prior 6 months in Denver has decreased by $23 (-1.4%).
- One-bedroom units have decreased by $27 (-1.9%).
- Two-bedroom apartments have decreased by $12 (-0.7%).
According to RENTCafe, 151,260 or 51% of the households in Denver, CO are renter-occupied while 143,098 or 48% are owner-occupied. The average size for a Denver, CO apartment is 842 square feet with studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage. 36% of the apartments fall in the price range of $1,501-$2,000 while 40% fall in the price range of $1,001-$1,500.
The most affordable neighborhoods where the asking prices are below the average Denver rent are:
- Barnum, where the average rent goes for $1,010/month.
- Mar Lee, where renters pay $1,010/mo on average.
- Westwood, where the average rent goes for $1,010/mo.
- Chaffee Park, where the average rent goes for $1,218/mo.
- Regis, where the average rent goes for $1,277/mo.
- Harvey Park South, where the average rent goes for $1,279/mo.
Denver Is Relatively Landlord-Friendly
Colorado is relatively landlord-friendly; compare it to the West coast, and it is a landlord’s dream. You don’t have to give tenants notice that you’re entering a property. You can quickly begin evictions if they haven’t paid the rent. That protects your investment in the Denver housing market. There’s no limit on late fees. There are no state laws that prevent you from rekeying the locks after evicting them. If they violate the lease, give them formal notice. The tenants then have 72 hours to correct the issue or move out. If they don’t comply with notices, then you can go to court. If the court agrees with you, the sheriff gives the tenants 48 hours to move out before forcing them out.
Denver Colorado Real Estate Investment Opportunities
Investing in Denver's real estate can be a worthy investment due to a steady rate of appreciation. There are many reasons why the Denver real estate market is going strong today and certain to remain strong for years to come. You cannot afford to miss out on this growing and appreciating real estate market. Good cash flow from Denver investment properties means the investment is, needless to say, profitable.
A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Denver real estate investment opportunity would be key to your success. Even as Denver home prices have reached new heights, the market remains attractive to residential real estate investors in the $300,000 to $399,000 price range. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain.
The homebuyers won’t be able to outbid real estate investors and would end up renting. The high prices combined with the lack of higher gains have slowed down fixing and flipping investment properties in Denver. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Denver and want to purchase property to rent out. The three most important factors when buying real estate anywhere are location, location, and location.
The location creates desirability. Desirability brings demand. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Denver investment property and you should be able to flip it for a lump sum profit. The neighborhoods in Denver must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls.
Some of the popular neighborhoods for buying a house or an investment property in Denver are Jefferson Park, Berkeley, Park Hill, Cheesman Park, Congress Park, Hilltop, Sunnyside, Capitol Hill, Highland, Platte Park, Stapleton, Reunion, Cherry Creek, Aspen, and Washington Park.
Denver housing prices are not only among the most expensive in Colorado but they are also some of the most expensive in all of the United States. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. As with any real estate purchase, act wisely. Evaluate the specifics of the Denver housing market at the time you intend to purchase. Hiring a local property management company can help in finding tenants for your investment property in Denver.
The inventory is low, but opportunities are there. According to Realtor.com, there are 69 neighborhoods in Denver, where properties are available for sale. Washington Park has a median listing price of $1.2M, making it the most expensive neighborhood. Capitol Hill is the most affordable neighborhood, with a median listing price of $310K.
The asking price of Denver single-family homes (on Realtor.com) starts from $45,000 and can go up to $6.6M for a luxury property located in the East Denver neighborhood. Another popular neighborhood and expensive neighborhood in Denver is Cherry Creek where the median home price is around $898,000. The home values in Cherry Creek have risen by 0.2 % over the past 12 months. For buyers, the good thing is that this area has cooled off. There are more than enough homes for sale to meet the demand.
If you think of investing in Denver, you have decided on a long-term investment property. Here are the ten neighborhoods in Denver having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- Smith Rd / Havana St
- W Colfax Ave / Irving St
- Yeshiva Toras Chaim Talmudical Seminary / W Colfax Ave
- W Colfax Ave / Broadway
- Santa Fe Dr / W 8th Ave
- Metropolitan State College of Denver / Wazee St
- E 35th Ave / York St
- E 26th Ave / York St
- Larimer St / Broadway
Colorado Springs is another sizzling hot market for real estate investment in 2020. The Colorado Springs real estate market contains several large populations of renters, many practical reasons for people to move here from the surrounding area and across the country, and long-term factors that will drive growth for years to come. Forget the Mile High City and invest in the Colorado Springs real estate market.
Aurora is a fairly large city on the east side of Denver. Its proximity to Denver has long kept it in the realm of the Denver suburb. The Aurora real estate market 2020 is seeing rising prices & rents. Aurora, Colorado is more than a growing suburb. It is a large, thriving city in its own right. It has a bright future, and it is poised for rapid appreciation and increasing rental rates. This is a good time to invest in the Aurora real estate market.
Boulder real estate market is another good place to buy investment properties. Boulder is located in northern Colorado. The Boulder metro area is becoming a high-tech hub, driving up rental rates and property values. Others are lured here by the promise of high paying jobs or attending school somewhere they can intern at Big Tech firms without paying a fortune. Boulder’s economy is stabilized by the presence of government research institutes and the proximity to Denver’s buzzing economy.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Denver, Colorado.
Consult with one of the investment counselors who can help build you a custom portfolio of Denver turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Denver.
Not just limited to Denver or Colorado but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Denver turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
Is It The Right Time To Invest In Real Estate? – The national homeownership rate is on the decline for the first time since 2017. As demographics change and baby boomers retire, you’re seeing Millennials who may not be ready to buy houses. In 2018, Millennials made up about 22 percent of the population in the United States. They’re choosing to rent over buying a single-family home or an apartment. Rising home prices and shortage of starter homes have not left Millennials many choices but to delay homeownership. Moreover, it's even harder to take out a mortgage for those who have student loan debt.
Let us know which real estate markets in the United States you consider best for real estate investing!
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Denver real estate. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
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