Wednesday, April 9, 2014
Denver's Housing Market Growth Stabilizes
Coming off of a record-setting 2013, Denver's housing market growth has perhaps inevitably plateaued. But by most national measures, it remains robust. The number of transactions closed increased 26.3 percent in 2013 over 2012, and the median price of houses for sale in Denver in 2013 jumped 10 percent. Though this level of increase won't be sustained, analysts predict the market will continue to show impressive stability and moderate growth. Real estate data website Zillow.com predicts a 2.1 percent increase in Denver home prices in 2014, a healthy increase but a significant cut from the estimated 9.3 percent gain in the previous year.
The Denver area's economy gains support from its stable and diverse industrial sector, offering good job opportunities for the younger demographic. The Millennial (20-to-34-year-old) population is projected to increase by 7.3 percent over the next five years, bringing a crowd of new home buyers to the Denver market. The city's housing inventory -- the time it would take to sell all properties on the market, an indicator considered "balanced" at six months -- averaged less than three months in 2013, lower than the national average of about five months. A strong economic outlook, rising home prices and a tight inventory will keep the Denver home seller in the driver's seat. FSBO (for sale by owner) sellers listing their homes without the services of a real estate agent will further benefit, saving the agent's 6 percent commission, an average of $14,786 in the Denver market.
The most important features driving a purchase for Denver home buyers are in the areas of home amenities and floor plans, according to a 2014 survey by ForSaleByOwner.com. Nearly half of Denver home buyers list a garage or carport as the most important feature in a home they are considering purchasing. A house in move-in condition was next on the list, followed by an open floor plan. Central air and a single-level home round out the top five important features. The most common deal breakers for buyers are a lack of a garage or carport, a house that is not in move-in condition and a lack of central air.
Popular neighborhoods within the city of Denver include Capitol Hill, the city's most densely populated community, which offers residential options ranging from historic mansions to new condominium and apartment buildings. The Highlands, established in 1858, is one of the most sought-after residential areas within the city because of its proximity to downtown. Hilltop and neighboring Crestmoor are among the wealthiest communities in Denver and include two-story colonials, English Tudors and Georgians, as well as newer-construction properties that are replacing homes from the 1940s and 1950s.
Communities outside of the city include Cherry Hills Village, an affluent suburb with some of the state's most expensive homes as well as an extensive system of hiking trails and a wide variety of recreational facilities. Castle Rock, named for a rock formation near the center of town, lies between Denver and Colorado Springs and includes homes with stunning views of the surrounding rocky buttes and pine forests. Boulder, 25 miles northwest of Denver, is the home of the University of Colorado and frequently appears on lists of the best places to live based on its rich variety of cultural, educational and recreational offerings.
Up next: Boston, where robust healthcare and technology industries boost the economy, but high costs of living and below-average population growth temper the boom.
See what other cities made our Top Real Estate Markets list.