The Denver market has been making national news for several years now with its ever strong and unbelievable post-Great Recession rebound. And with each passing year, the rumors continue to swirl around the idea that the trend will have to be coming to an end. Is this the year that things will start to change? Will values simmer? Will mortgage rates go up? Will inventory increase and the market become more balanced for both buyers and sellers? Or, will the trends continue in 2018? If we only had a crystal ball. In today’s cultural climate it seems to be a bit of a joke to think of anything as being predictable.
That being said, we should still consider 2017’s statistics, real estate market data and other indicators that can hopefully give us some kind of a clue about what to expect in 2018. It’s this data that suggests that Denver’s market should stay healthy while remaining a seller’s market.
Since 2012, the Denver housing prices have increased between 8 and 11 percent every year. While last year represented the lower end of this spectrum it was still a great year for growth. There is no question that the continued low inventory is a driving factor at the heart of Denver’s price increases. While we expect inventory to increase this year, it will hardly catch up to the demand causing the average sales price in the Denver metro area to near the $450K range.
What’s even more telling is the performance of the luxury market, where the number of new listings of homes priced at $1 million or more was up 11 percent and the total volume of sales increased by more than 20 percent. Likewise, values have continued to rise by 15 percent or more in some coveted neighborhoods like Bonnie Brae/Belcaro, Bow Mar South, Cherry Hills Village, City Park, Country Club, Crestmoor, Downtown, Hilltop, Observatory Park, Platte Park and Washington Park West.
Some are even predicting that the Denver area housing market will see a big value increase in 2018. In fact, some are projecting that it will appreciate more than any other market in the U.S. outside of Washington state in the next year. Veros Real Estate Solutions of California predicts residential market values in the Denver-area housing market will increase 9.9 percent in value in the next year, behind only the Seattle area (11.1 percent increase), Bellingham, Washington (10.1 percent) and the Kennewick-Pasco-Richland area in southeast Washington (10 percent). Nationally, housing should appreciate by 4.3 percent in the coming year, according to the report.
We may not have a crystal ball, but at a bird’s eye view, we have a healthy market, a solid economy, and our unemployment is still relatively low. Our real problem is building fast enough to create a stronger inventory for the ever-growing Denver population. It’s this very problem that will continue to drive the market values. People moving to Denver from more expensive markets like New York, San Francisco and Southern California still look at Denver, by comparison, as an affordable marketplace that has yet to be fully realized. It’s with this idea in mind, that we should reconsider the future of our market in relation to those more expensive markets because that is where we are most likely heading.
If I can help you with your real estate needs, I would love to put my fifteen years of experience to work for you. Contact Sam DeStefano at 303-594-1048 or sam@mbrealestatepros.com