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Is Denver The Hottest Real Estate Market For Investors In 2019?

Denver Real Estate Market Overview

We’re going to give you an overview of Denver, Colorado before we go into the reasons why you would want to invest in the Denver real estate market. And we won’t be citing generic platitudes like it is a diverse or beautiful place. We’ll focus on real reasons to invest your money in the Denver real estate market. Denver is the largest city in Colorado, home to just over 700,000 people. The Denver metropolitan area is home to around 2.7 million people. The Denver-Aurora, Colorado statistical area is home to about three and a half million people. Of greater important to potential investors, the area is still growing. Here is an overview of the Denver housing market.

Denver real estate market

Denver Real Estate Market Forecast 2019

According to real estate information company named Zillow, Denver is a hot buyer’s market. The median home value in Denver is $414,500. Denver home values have gone up 6.9% over the past year and Zillow’s forecast for Denver real estate market is that they will rise 6.0% within the next year. The median list price per square foot in Denver is $425, which is higher than the Denver-Aurora-Lakewood Metro average of $265. The median price of homes currently listed in Denver is $465,000 while the median price of homes that sold is $408,500. The median rent price in Denver is $2,100, which is higher than the Denver-Aurora-Lakewood Metro median of $2,050.

Denver Real Estate Market Forecast 2019

Graph Courtesy – Zillow.com

Denver Real Estate Market Trend 2018

According to another real estate information company named Trulia, Denver housing market trends in 2018 indicate an increase of $22,500 (6%) in median home sales and 0% rise in median rent per month over the past year. The average price per square foot for this same period rose to $469, up from $441. Trulia has 3,639 resale and new homes in Denver lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

Denver Housing Market Summary:

  • Median Sales Price: $405,000
  • Price Per Sqft: $469
  • Homes For Sale on Trulia: 3,639
  • Median Rent Per Month: $2,200
  • Median Household Income: $48,446
  • Home Owners: 58%
  • Single Residents: 45%
  • Median Age: 34
  • College Educated: 42%
  • The median rent per month for apartments in Denver for Sep 1 to Oct 1 was $2,200.
  • The median sales price for homes in Denver for Jun 27 to Sep 26 was $405,000 based on 3,376 home sales.
  • Average price per square foot for Denver was $469, an increase of 6% compared to the same period last year.

As per Movoto.com, the median list price in Denver is $535,000. The median list price in Denver was less than 1% change from September to October. Denver’s home resale inventories is 1,917, which increased 0 percent since September 2018. The median list price per square foot in Denver is $321. September 2018 was $319.
Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in October.

Denver Housing Market Trend 2018

Graph Courtesy – Movoto.com

In Downtown Denver, the home resale inventories decreased, with a -9 percent decreased since September 2018. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in October. The median listing price in Denver went down from September to October.

As per Neigborhoodscout.com, single-family detached homes are the single most common housing type in Denver, accounting for 46.24% of the city’s housing units. Other types of housing that are prevalent in Denver include large apartment complexes or high rise apartments ( 39.83%), row houses and other attached homes ( 7.77%), and a few duplexes, homes converted to apartments or other small apartment buildings ( 5.85%). Denver real estate has continued to appreciate in value faster than most communities. Looking at just the latest twelve months, Denver appreciation rates continue to be some of the highest in America, at 8.50%, which is higher than appreciation rates in 89.99% of the cities and towns in the nation. Based on the last twelve months, short-term real estate investors have found good fortune in Denver. Denver appreciation rates in the latest quarter were at 2.57%, which equates to an annual appreciation rate of 10.66%.

Denver, CO Single Family Homes

The DMAR Market Trends Committee, part of the Denver Metro Association of REALTORS®, provides timely, consistent, and relevant monthly summaries of valuable local real estate market statistical data for both its members and the general public. Statistics from the “Denver Metro Real Estate Market Trends Report” show us that the housing market inventory in Denver continues increasing despite typical seasonal decrease, home prices fall and sales of single-family homes priced over $500,000 drop in September.

Looking at the single-family home market in Denver, the average sold price decreased 3.79 percent month over month to $502,034, while the median price decreased 2.73 percent to $428,000. The year-to-date average sold price stands at $523,224 for the single-family home market, up 9.16 percent from last year, with the median sold price at $445,000, up 8.54 percent. Condos continue to outperform single-family home prices with the average sold price of $350,766, representing an 11.38 percent increase over 2017. The median price of condos sold also increased by 12.34 percent to $299,900.

denver housing market trend 2018

Table Courtesy – Denver Metro Association of REALTORS®

The highest priced single-family home sold in September was $5,100,000 representing eight bedrooms, seven bathrooms and 7,172 above ground square feet in Greenwood Village. The highest priced condo sold was $1,290,000 representing three bedrooms, four bathrooms and 2,397 above ground square feet in Denver. The listing and selling agents for both transactions are DMAR members.

The above information was taken from DMAR’s website. You can download DMAR’s Complete October Market Trends Report in PDF from their website.

Denver CO Foreclosures Trends

Foreclosures will be a factor impacting home values in the next several years. In Denver 0.1 homes are foreclosed (per 10,000). This is the same as the Denver-Aurora-Lakewood Metro value of 0.1 and also lower than the national value of 1.6. The percent of delinquent mortgages in Denver is 0.5%, which is lower than the national value of 1.6%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Denver homeowners underwater on their mortgage is 6.0%, which is higher than Denver-Aurora-Lakewood Metro at 4.8%.

On RealtyTrac.com, there are currently 661 properties in Denver, CO that are in some stage of foreclosure (default, auction or bank owned) while the number of homes for sale in Denver, CO on RealtyTrac is 446. In September, the number of properties that received a foreclosure filing in Denver, CO was 26% lower than the previous month and 14% lower than the same time last year. Home sales for August 2018 were down 68% compared with the previous month, and down 13% compared with a year ago. The median sales price of a non-distressed home was $386,500. The median sales price of a foreclosure home in Denver was $0, or 0% higher than non-distressed home sales.

10 Most Expensive Denver Neighborhoods: By Neigborhoodscout.com

Housing costs in Denver are among some of the highest in the nation, although real estate prices here don’t compare to real estate prices in the most expensive communities in Colorado. Here the 10 most expensive neighborhoods to live in Denver, CO.

  1. E Bayaud Ave / Leetsdale Dr
  2. E 6th Ave / Humboldt St
  3. E Evans Ave / S Colorado Blvd
  4. E Exposition Ave / S Colorado Blvd
  5. E 6th Ave / Josephine St
  6. S University Blvd / E Exposition Ave
  7. E 8th Ave / York St
  8. Montview Blvd / Glencoe St
  9. Wewatta St / 15th St
  10. Smith Rd / Havana St

10 Highest Appreciating Denver Neighborhoods: By Neigborhoodscout.com

In the last 10 years, Denver has experienced some of the highest home appreciation rates of any community in the nation. Denver real estate appreciated 85.51% over the last ten years, which is an average annual home appreciation rate of 6.37%, putting Denver in the top 10% nationally for real estate appreciation. Therefore, as a real estate investor or home buyer, it makes sense to buy and hold properties in these Denver neighborhoods for getting the maximum return on your investment. These are the 10 highest appreciating neighborhoods in the Denver real estate market since 2000.

Top 10 Reasons To Invest In Denver Real Estate Market In 2019

Here are the top 10 reasons to invest in the Denver real estate market in 2019.

1. 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 mountainous landscape than flat plains. In Denver’s case, the massive national forests and Rocky Mountain Park to the west of Denver and its suburbs prevent expansion of the Denver housing market in that direction. This keeps home prices higher than they’d be in places like Dallas.

2. 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 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. That isn’t enough on its own to draw huge numbers of people to the Denver real estate market, but it is a factor. We’ll address the biggest factor pulling people to the Denver housing market next.

3. Jobs, Jobs, Jobs

Jobs are a major reason why people move to Denver in the first place. The area’s unemployment rate is less than 3%. In fact, Denver’s unemployment rate has been well below the national average for years. 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.

4. 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.

5. 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.

6. Strong ROI From Denver Investment Properties

The median home price is just under $400,000. That’s a steal for the refugees from California, but the sheer numbers of them coming in is pricing locals out of the housing market. 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.

7. 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 attracts 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. That will propel the Denver real estate market for decades to come.

8. The Large, Diverse College Market

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 classic, private liberal arts schools who found themselves rendered redundant after brand name schools opened their doors, there’s less demand for the rental or 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 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.

9. It 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.

10. A Growing Rental Market

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. 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.

Investing In The Denver Housing Market: The Conclusion

denver housing market

If you are a beginner in the business of real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Portland, OR. 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, appreciating real estate market.

Similarly, the Portland real estate market is another hot market to choose for real estate investing. It is booming because the economy is doing well on its own and the area is head and shoulders above California’s deteriorating situation. The Portland real estate market has experienced double-digit annual price growth in recent years. Home values rose 11.4% in 2016 alone, according to a report from the real estate data company Clear Capital. The home prices in the Portland, Oregon housing market have slowed considerably over the last few months. And that’s a good thing, from a sustainability standpoint.

Another hot market for investors in 2019 is the Charlotte real estate market. Charlotte is the largest city in North Carolina. The city proper is home to more than 800,000 people. The metropolitan area is even larger – home to roughly two and a half million people. It is one of the country’s fastest growing metro areas, and it was the second fastest growing city in the southeastern United States. Only Jacksonville, Florida was growing faster between 2004 and 2014. One advantage to living in a big city like Charlotte is the constant demand for homes. Buying a home in Charlotte is a better investment, depending upon several factors. There are so many major companies and professional sporting events that people will always be interested in residing here. Therefore, interested investors aren’t likely to allow the listing prices to get to low before they swoop in and take advantage.


References:

Places to live, unemployment, rent
https://realestate.usnews.com/places/colorado/denver

Colorado area population
https://en.wikipedia.org/wiki/Denver

Colleges
https://www.collegesimply.com/colleges-near/colorado/denver/

Landlord friendly
http://www.landlordstation.com/blog/top-landlord-friendly-states        https://www.avail.co/education/laws/colorado-landlord-tenant-law

Denver tourism
https://www.mashvisor.com/blog/why-where-invest-denver-real-estate/
https://www.denverpost.com/2014/12/16/denver-experiencing-its-best-convention-year-ever/

Short term rentals
https://crej.com/news/airbnb-31-billion-gorilla-room                                      https://businessden.com/2018/08/27/50-of-airbnb-landlords-ignore-denver-rules-taxes-in-booming-100m-industry

Growing rental market                                                                                  https://www.5280.com/2017/04/everything-know-denvers-real-estate-market-wrong
https://www.forbes.com/sites/ingowinzer/2016/07/31/should-you-invest-in-denver-area-real-estate/#16f926277fc5

Redevelopment
https://denverinfill.com/home-old.htm
https://www.denverpost.com/2018/03/06/river-mile-denver-elitch-gardens-redevelopment/

Market Data, Trends and Forecast                                                                                    https://www.zillow.com/denver-co/home-values                                            https://www.trulia.com/real_estate/Denver-Colorado                  https://www.realtytrac.com/statsandtrends/co/denver-county/denver                    https://www.dmarealtors.com/dmar-real-estate-market-trends-report-oct-18          https://www.movoto.com/denver-co/market-trends                            https://www.neighborhoodscout.com/co/denver


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