Metro Denver’s robust economy provides consumers with more to spend on housing: resulting in higher real estate prices
Metro Denver’s real estate market has the distinction of being one of the best long-term real estate investments in the country. Prospective homebuyers in the region have more money to spend on houses than most other metropolitan areas in the U.S., which subsequently increases the price of real estate.
Home values rose so much over the past six or seven years that affordability became an issue for a person earning the median income in the area. Since February 2012, the metro Denver home values have appreciated by nearly 156.7 percent. The typical home value of homes in metro Denver is currently nearly $600,000, according to one national marketing firm, which is more than twice what a similar home sold for just a few years ago but also significantly lower than other market observers report who live and work in the Denver area.
Since January 2021, the typical value of homes in metro Denver increased by 23 percent. Denver is currently a seller’s market, which means that demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations. There are fewer homes for sale than there are active buyers in the market.
One local market analysis group shows that in the past 210 years, the Denver real estate market appreciated by nearly 144 percent. This amounts to an annual real estate appreciation of 9.31 percent, which puts Denver in the top 10 percent nationally for real estate appreciation.
During the past 12 months alone, the Denver appreciation rate has been at nearly 16.4 percent, and in the first quarter of 2022, the appreciation rate has been at almost 7.88 percent. If this remains steady, the annualized rate of appreciation becomes 35.46 percent, which made one industry observer to state that building a brand new home can be significantly less expensive than buying a previously-owned home.
One reputable forecast is that the shortage of supply and an increase in the demand for housing from new homebuyers will push the prices higher in the next 12 months. If mortgage rates remain low, it will continue to bolster the home buying activity and push home prices up. For sellers, now is the opportune time to put their metro Denver home up for sale. The pricing of homes is trending higher and is more attractive for sellers in the current phase.