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November 7th, 2019 by Marco Santarelli
Real estate can be a worthy investment opportunity. With research, a plan and the right price, just about anyone can be a real estate investor. If you’re keen to invest in the Denver real estate market in 2020 and buy before prices become out of reach, you must read till the end.
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. 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 housing market.
If you are an investor, Denver definitely has a track record of being one of the best long term real estate investments in the nation. 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. There are a number of reasons to consider investing in the Denver real estate.
Is Denver going to be one of the hottest real estate markets for investors in 2020? To answer this question, let’s take a look at the latest Denver housing market trends and find out the prospects of investing in the Denver real estate in 2020.
Denver Real Estate Market News
The Denver real estate market hasn’t fully transitioned into a buyer’s market yet. But it’s shifting in that direction. Despite the big gains in housing stock, the Denver area is still very much a seller’s market. Denver-area home prices are holding steady year-over-year and inventory is increasing significantly.
The number of homes for sale in the Denver metro area was up significantly in April 2019 and the median sold price remained unchanged year-over-year, according to the latest data from the Denver Metro Association of Realtors.
May 2019 ended with more homes for sale in metro Denver than any other month in the past five years. May saw a slight increase in Denver’s median sold price, which hit $431,000 for the entire residential market, including both condos and single-family detached homes.
For anyone looking to buy a home in the Denver area right now, the real good news is the increase in the number of homes to choose from.
Metro Denver’s housing market news is that the area is already showing signs of softening and could come under further pressure if economy and job growth weakens. Home sales in metro Denver were down 14 percent in June 2019 compared to a year ago.
Another good news related to Denver real estate is that a Colorado startup is hoping to change the ways home buying works in the Denver metro area and level the playing field for the middle class. Their idea is to provide the cash for the home up front to give the buyer leverage over the competition.
A company called BoardRE will supply the money to buy the home to pre-approved buyers and work with them to determine which houses they can afford.
This company will supply the money to buy the home to pre-approved buyers and work with them to determine which houses they can afford.
According to this company, similar to a traditional lender, would-be homebuyers must get pre-approved through the company. After being approved, the company tells the buyer how much cash they will provide, and then it’s up to the homebuyer to look for their dream home with their real estate agent.
Once the buyer and the buyer’s agent say that they would like to put a cash offer on a home, they let them know and effectively from there BoardRE becomes the buyer.
After that, there is a second closing, and the home is sold to the homebuyers themselves. That loan is then sold to a more traditional secondary lender like Fannie Mae or Freddie Mac, which this company shops for the best rate.
Through this step the company is hoping that with more sales and more time, they will prove itself to be a new way to go about home buying in the Denver housing market.
Denver Real Estate Market Forecast 2020
According to real estate information company named Zillow, Denver is a neutral real estate market. The median home value in Denver is $422,400. Denver home values have gone up 1.4% over the past year and their Denver real estate market prediction is that the prices will fall -0.3% within the next year.
The median list price per square foot in Denver is $375, which is higher than the Denver-Aurora-Lakewood Metro average of $268.
The median price of homes currently listed in Denver is $475,000 while the median price of homes that sold is $420,900. The median rent price in Denver is $2,195, which is higher than the Denver-Aurora-Lakewood Metro median of $2,100.
Here is the Denver, CO real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of -0.3% till Aug 2020.
Denver Housing Market Forecast 2020 – 2021
Here is a short and crisp Denver housing market forecast 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. The LittleBigHomes.com estimates that the probability for rising home prices in Denver is 76% during this period. If this price forecast is correct, the Denver home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Denver Real Estate Market Forecast.
Denver Real Estate Market Trends
According to another real estate information company named Trulia, Denver real estate market trends indicate a decrease of $500 (-0%) in median home sales and a 1% rise in median rent per month over the past year. The average price per square foot for this same period rose to $343, up from $336.
Trulia has 3,502 resale and new homes for sale in Denver, CO, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in Denver for Dec 21 to Mar 20 was $384,500 based on 2,186 home sales. Average price per square foot for Denver was $343, an increase of 2% compared to the same period last year. The median rent per month for apartments in Denver for Feb 25 to Mar 25 was $2,200.
Denver Housing Market Statistics
As per Redfin.com’s data, The Denver housing market is very competitive. Homes in Denver receive 1 offers on average and sell in around 14 days. The average sale price of a home in Denver was $426K last month, up 1.4% since last year. The average sale price per square foot in Denver is $270, up 6.1% since last year.
Homes typically receive 1 offer. Homes in the Denver housing market sell for about 1% below list price and go pending in around 14 days. Hot homes in Denver, CO can sell for about 1% above list price and go pending in around 4 days.
There are 5,755 homes for sale, ranging from $14K to $32M on Realtor.com. 696 of which were newly listed within the last week. Additionally, there are 1,365 Denver rental properties, with a range of $350 to $8000 per month. In February 2019 the housing market in Denver, CO was a buyer’s market, which means there were roughly more active homes for sale than there were buyers. Buyer’s markets are generally more advantageous for buyers rather than sellers.
In February 2019, the median list price of homes in Denver, CO was $390K, trending up 4% year-over-year. The median listing price per square foot was $225. The median sale price was $380,800. Homes in Denver, CO sold for approximately the asking price on average in February 2019. On average, homes in Denver, CO sell after 43 days on the market. The trend for median days on market in Denver, CO is flat since last month, and flat since last year.
As per Movoto.com, the median list price in Denver is $585,000. The median list price in Denver went up 1% from March to April. Denver’s home resale inventories is 1,489, which decreased 6 percent since March 2019. The median list price per square foot in Denver is $346. March 2019 was $342. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in April.
In Downtown Denver, the home resale inventories decreased slightly, with a -4 percent decreased since March 2019. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in April. The median listing price in Denver stayed the same from March to April.
Denver CO, Single Family And Multi-Family Homes
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.
Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
As per Neigborhoodscout.com, single family detached homes are the single most common housing type in Denver, accounting for 45.85% of the city’s housing units.
Other types of housing that are prevalent in Denver include large apartment complexes or high rise apartments ( 40.18%), row houses and other attached homes ( 7.85%), and a few duplexes, homes converted to apartments or other small apartment buildings ( 5.79%).
People in Denver primarily live in small (one, two or no bedroom) single-family detached homes. Denver has a mixture of owner-occupied and renter-occupied housing.
Currently, there are 1,196 single family homes for sale in Denver, CO on Zillow. These include upcoming potential listings. Additionally, there are 515 single family homes for rent in Denver, CO.
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.
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 And Bank Owned Homes Statistics
Foreclosures will be a factor impacting home values in the next several years in Denver. According to Zillow, in Denver 0.3 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%. 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 4.7%, which is higher than Denver-Aurora-Lakewood Metro at 3.9%.
There are currently 507 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 430. In August 2019, the number of properties that received a foreclosure filing in Denver, CO was 4% higher than the previous month and 1% lower than the same time last year.
Denver Home Prices And Real Estate Appreciation
Over the last 20 years, Denver has proven that it will generate equity quickly regardless of almost any purchase price. The first reason is that there is little real estate to be had in downtown and the surrounding area.
As such, the home prices in Denver rarely fall, almost always growing in value. According to the stats from Neigborhoodscout.com, the Denver real estate appreciated 103.25% over the last ten years, which is an average annual home appreciation rate of 7.35%, putting Denver in the top 10% nationally for real estate appreciation.
Real Estate appreciation rates are so strong in Denver that despite a nationwide downturn in the housing market, Denver real estate has continued to appreciate in value faster than most communities.
In the latest twelve months, Denver real estate appreciation rates continue to be some of the highest in America, at 10.12%, which is higher than appreciation rates in 93.37% 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 1.74%, which equates to an annual appreciation rate of 7.16%.
Relative to Colorado, their data shows that Denver’s latest annual appreciation rate is higher than 60% of the other cities and towns in Colorado.
Best Neighborhoods to Invest in Denver Rental Real Estate
If you are looking to buy real estate in Denver, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Denver real estate and you should be able flip it for a lump sum profit.
When looking to invest in Denver real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Denver investment property should be low. 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 and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties.
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. There are 164 neighborhoods in Denver. There are 638 schools in Denver, CO. There are 265 elementary schools, 139 middle schools, 118 high schools and 116 private & charter schools.
Cherry Creek has a median listing price of $863.8K, making it the most expensive neighborhood. Heather Gardens is the most affordable neighborhood in Denver, with a median listing price of $249,000.
Here the 10 best neighborhoods in Denver to invest in real estate (List by Neighborhoodscout.com). These neighborhoods have the highest real estate appreciation rates in Denver.
Therefore, as a real estate investor or home buyer, it makes sense to buy and hold investment properties in these top Denver neighborhoods for getting the maximum return on your investment.
Should You Invest in Denver Rental Real Estate?
Investing in real estate is touted as a great way to become wealthy. Is Denver rental property good for investment? If you are looking to buy Denver investment properties, then you must read this. These things make Denver real estate market stand out when it comes to choosing a place to invest in 2019 and beyond.
The Denver home prices have been trending up 4% year-over-year. No doubt Denver is an expensive real estate market. But, if you can can afford to buy a house, Denver has proven that it will show investors a return on their money. The Denver real estate market offers everything from mansions to one bedroom apartments and everything in between.
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.
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.
Denver Real Estate Investment
Maybe you have done a bit of real estate investing in Denver, CO but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. A good cash flow 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 a key to your success. If you invest wisely in Denver real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.
The less expensive the Madison investment property is, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.
Most investors naturally gravitate to residential property investment. When looking for the best real estate investments, you should focus on markets with relatively high population and employment growth. Both of them translate into high demand for housing.
If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.
You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Denver, CO. 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.
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 area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Denver real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Best Places To Invest in Real Estate in 2019
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.
We also suggest the Des Moines real estate market which is strengthened by its rich and growing economy. The local real estate market went through a slow recovery after the housing crisis in 2008.
However, it has been gaining momentum the last few years and is poised to continue growing thanks to the Des Moines’ solid economy and population growth.
Des Moines has long been the “US insurance capital”, providing a wealth of professional jobs in a city otherwise defined by civic service, education and agricultural jobs. Many insurance headquarters and large financial services companies are located in Des Moines.
However, it has sought to diversify its economy and expand its tax base. Des Moines made the Forbes list recently as the fifth best city in the U.S. for business and careers.
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.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here.
One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.
*Remember, caveat emptor still applies when buying a property anywhere. 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.
Places to live, unemployment, rent
Colorado area population
Short term rentals
Growing rental market https://www.5280.com/2017/04/everything-know-denvers-real-estate-market-wrong
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 https://www.littlebighomes.com/real-estate-denver.html https://www.realtor.com/realestateandhomes-search/Denver_CO/overview https://www.redfin.com/city/5155/CO/Denver/housing-market
Denver Real Estate News https://www.thedenverchannel.com/lifestyle/real-estate/denver-area-home-prices-holding-steady-year-over-year-inventory-up-significantly https://www.thedenverchannel.com/lifestyle/real-estate/may-2019-ended-with-more-homes-for-sale-in-metro-denver-than-any-other-month-in-the-past-five-years
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