Denver 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. 2020 will be another strong year for the Denver housing market. The Denver real estate market has currently transitioned into a buyer’s market.
Despite the big gains in housing stock, the Denver-area home prices are holding steady year-over-year and inventory is increasing significantly. The Denver real estate appreciation rate in the last quarter was around 1.7%. However, it is quite unclear whether it would remain steady or not. Looking at the positive forecast, the annual appreciation rate is predicted to be between 5% to 6%.
Historically, Denver has a track record of being one of the best long term real estate investments in the nation. It 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 it going to be one of the hottest real estate markets for investors throughout 2020? Significant gains in home values are predicted in 2020 due to low interest rates, a strong job market, and a steady economy. Let’s find out more about it. Please note that there are many variables that can potentially impact the value of a home in Denver (or any other market) and some of these variables are impossible to predict in advance.
Denver Real Estate Market Forecast 2020
What are the Denver real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home price in Denver have appreciated by 45.65% from $310,000 to $451,513. In the past year, the Denver real estate market cooled off, the prices increased by only 0.2%. Last year saw was the eighth consecutive year of home price gains. The latest Denver real estate market forecast is that home prices will increase by 2.2% in the next twelve months.
However, according to many experts you shouldn’t expect any sizable or significant gains based on current conditions. The latest real estate data from Zillow shows that the current median home value in Denver is $451,513. Denver is currently a buyer’s real estate market – which refers to a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.
Here is the Denver, CO real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 2.2% till Dec 2020.
The median list price per square foot in Denver is $375, which is higher than the Denver-Aurora-Lakewood Metro average of $267. Zillow reports that 11.1% of the listings in Denver had a price cut in Dec 2019, which is a good thing for buyers. The median price of current listings in Denver is $465,000. The median price of homes that have been sold is $438,900. The median rent price in Denver is $2,150, which is higher than the Denver-Aurora-Lakewood Metro median of $2,100.
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 Housing Market Trends
We shall now discuss some of the most recent housing trends in the Denver area and compare it with past couple of years. We shall mainly discuss about 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 has been one of the hottest real estate markets in the country for many years.
Let’s first take a look at some of the last year’s data. 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 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.
After a remaining almost flat throughout 2019, with a mere 0.2% rise in prices, the Denver housing market is showing little signs of a gains. Metro Denver home prices, after years of significant gains, are going as flat as last year. Despite a few slight shifts in the market last year, 2020 has begun very much still in favor of sellers. According to the Colorado Association of Realtors, the median sales price in Denver was $490,000 in November, up 7.3% from a year earlier. The number of homes available for sale, however, is down 35.4% during the same period.
Currently, there are less than two months worth of inventory for both detached homes and single family homes. According to realtors, as inventory is declining in this region, it can result in the upswing of home prices. Trulia has currently 2,434 resale and new homes for sale in Denver including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median price of sold homes in Denver housing market is $434,000 and homes are selling for about $375/sqft.
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 the real estate company called Neigborhoodscout.com, the median house price in Denver is $433,974, which indicates that home prices in Denver are well above the national average for all cities and towns in the United States. 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, row houses and homes converted to apartments.
Currently, there are 650 single family homes for sale in Denver, CO on Zillow. Additionally, there are 396 single family homes for rent in Denver, CO. Under potential listings, there are about 0 Foreclosed and 177 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
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. Their latest statistics show that in January 2020, 4,853 new listings came on the market, a massive 89.27 percent increase from the month prior. However, the month ended with 4,941 active listings, 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 35.19 percent drop in sales volume month over month in January which was a reflection of the slower 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 the month of January in at least the past four years. The above information was taken from DMAR’s website.
In the past month, 858 homes have been sold in Denver, CO on Redfin.com. In addition to houses in Denver, there were also 672 condos, 121 townhouses, and 619 multi-family units for sale in Denver last month. The median listing price is around $490,000. According their statistics, the Denver housing market is very competitive. Homes in Denver receive 1 offers on average and sell in around 28 days.
The average sale price of a home in Denver was $421K last month, up 8.0% since last year. The average sale price per square foot in Denver is $285, up 9.4% since last year. A hot listing in Denver can sell for around list price and go pending in around 7 days.
Here is the latest Denver housing market data for the month of Jan 2020 from Redfin.com. The sale to list price ratio shows us that it was a trending more like a seller’s real estate market in the past month.
Denver Real Estate Market Trends
|Median List Price||$490,000|
|Avg. Sale / List||98.6%|
|Median List $/Sq Ft||$327|
|Median Sale Price||$421,000|
|Median Sale $/Sq Ft||$285|
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. There are currently 3,479 homes for sale in Denver on Realtor.com. The asking price of single family homes can start from $45,000 and can go up to $14M for a luxury property located in East Denver neighborhood in the city of Denver, CO. East Denver is a buyers’s real estate market with the median home price of $493,000.
Another popular neighborhood and most expensive neighborhood of Denver is Cherry Creek where the median home price is around $898,000. The home values in Cherry Creek have risen 0.2 % over the past 12 months. Zillow predicts the home values in Cherry Creek will decrease 1.9% in the next 12 months.
Denver has a mixture of owner-occupied and renter-occupied housing. There are currently 1,516 rental properties in Denver and their rent prices range from $650 to $10,000 per month. The median rent price in Denver is $1,650. According to Realtor.com, 579 is the number of newly listed homes within the last week. There are 316 new construction single family homes for sale in Denver within a price range of $215,000 to $4M. You can find affordable new construction homes in Northeast Denver neighborhood in the city of Denver, CO. The median listing price in Northeast Denver is $380,000.
According to their data, in January 2020, the Denver housing market was a buyer’s market, which means there were roughly more active homes for sale than there were buyers. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. Despite being a buyer’s market, the sellers have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 100% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
In January 2020, the median list price of homes in Denver, CO was $409.5K, trending up 6.4% year-over-year. The median listing price per square foot was $236. The median sale price was $350K.
The median list price in Denver is $575,000 on Movoto.com. The median list price in Denver went up 3% from January to February. Denver’s home resale inventories is 939, which increased 8 percent since January 2020. The median list price per square foot in Denver is $354.
As you can see in the graph, the median price per sq ft in Denver rose to its peak value in Dec 2019, when it was $360. In January 2020 it was $349. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in February
In Downtown Denver, home resale inventories decreased slightly, with a -5 percent decreased since January 2020. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in February. The median listing price in Denver went up from January 2020 to February.
Denver is a moderately walkable city in Denver County with a population of approximately 596,983 people. If you are looking to invest in the Denver real estate, you should that three most important factors when buying a real estate anywhere are location, location, and location. 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 real estate and you should be able 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. Cherry Creek has a median listing price of $898K, making it the most expensive neighborhood of Denver. Heather Gardens is the most affordable neighborhood, with a median listing price of $262.2K.
Some of the popular neighborhoods of 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.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods of Denver.
Denver, CO Foreclosures And Bank Owned Homes Statistics
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%.
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%.
|Total No. of Foreclosures in Denver||527 (RealtyTrac)|
|Homes for Sale in Denver||276|
|Median List Price||$399,900 (0% rise vs Nov 2018)|
There are currently 527 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 276. In December 2019, the number of properties that received a foreclosure filing in Denver, CO was 164% higher than the previous month and 63% higher than the same time last year.
In Denver, the zip code with the highest foreclosure rate is 80249, where 1 in every 938 housing units is foreclosed. 80211 zip code has the lowest foreclosure rate, where 1 in every 3450 housing units becomes delinquent.
How is Real Estate Investing in Denver?
Is Denver a Good Place to Invest In Real Estate? Now that you know where Denver is, you probably want to know why we’re recommending it to real estate investors. Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Denver is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.
Although, this article alone is not a comprehensive source to make a final investment decision for Denver, but we have collected ten evidence based positive things for those who are keen to invest in the Denver real estate in 2020. Let’s take a look at some factors that could make 2020 a good year to invest or buy a home in the Denver real estate market.
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. 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 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. Denver is 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 Denver Real Estate or Not: The Conclusion
Maybe you have done a bit of real estate investing in Denver 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. 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.
A 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 a key to your success. If you invest wisely in the Denver real estate, you could secure your future.
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. If it is your first time to invest in Denver real estate, then you would have to be aware of common beginner’s mistakes. Beginners would usually follow the media, buy a property and wait for its value to increase. This could be risky. Real estate investing requires research. We recommend doing your own research or hiring a real estate investment specialist for guidance.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. 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 Good Markets To Invest in Real Estate in 2020
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.
Another hot market for investors in 2020 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.
*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.
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