For most of 2014, Denver’s housing market has just looked up, up, up. Home values and sales prices continually increased, inventory has kept demand high, and plans for new construction are underway throughout the city.
So what’s next?
The latest statistics reveal a changing market. Even in the coming months, the rapid appreciation of home values is expected to slow despite a continuous influx of new Denver homebuyers. If you’re looking to buy or sell a home in Denver, these are the three biggest real estate changes you should be expecting for the near future.
1. Slower Price Increases
For awhile this year, Denver home values were speeding past old records with no sign of stopping. Tight inventory and a steady stream of new residents meant prices kept increasing—almost at a risky level. Some investors feared that Denver would enter a housing bubble, but with higher wages and lower unemployment, home values stayed within the range of affordability. Analysts predicted the price hikes would eventually slow down, and they have.
Zillow recently reported that “the brakes are on” for Denver home values. At the end of September they were up 11.3% from the previous year, but the metro area’s forecast is similar to that of the rest of the nation: 3.8%, a steady and stable figure that Denver is already reflecting. Over a third of Denver’s listings cut their listing price in September, which means the market is already cooling.
This is great news for any Denver homebuyer who’s been deterred by the prices over the past year. Ultimately, it’s good for homeowners too, since a stable market is more important than huge price gains. Colorado homes will continue to appreciate, but more steadily, so more safely.
2. More Foreclosed Properties
Slower price gains are usually a bad sign for real estate investors, but Denver has good news for them as well: The market is about to receive a lot more foreclosed properties.
According to the Denver Post, a year-long lawsuit against two of the state’s biggest foreclosure attorneys has slowed foreclosure auctions and led to a backlog of properties waiting to be sold. Since the middle of 2013, Colorado has had fewer seized homes to auction off, since the lawsuit had put a hold on everything. That’s going to change. In short, other foreclosure law firms are taking the cases, which means many of those backlogged homes are about to be up for sale. RealtyTrac predicted that Colorado would see a 50% increase from the second quarter in foreclosed properties at auction—and a 48% increase from the same three-month period a year ago.
Foreclosures often attract to real estate investors, but they can be a wise purchase for first-time homebuyers too. This influx is encouraging for a city that’s still struggling to increase its housing inventory. Competition on all properties should slacken, especially as we move into the winter months, when real estate activity all over the nation slows down.
3. Business Is Still “Booming”
Despite slower price gains and an influx of new affordable inventory, analysts all over the nation still consider Denver’s housing market to be “booming.”
NuWire Investor reported that investors are still flocking to Colorado to profit off of the high demand for housing. Though they have to act fast to buy properties, the ROI remains high throughout the state, and home sales in Denver specifically have hit new records. More people are buying both single-family homes and condos, with downtown Denver attracting a lot of real estate attention. Prices have gone up, but they remain lower than in markets like New York and San Francisco, where many of the new residents are coming from. Denver’s economy has grown and diversified, creating jobs and attracting professionals from both coasts. As long as this continues, the demand for Denver homes will continue to increase, keeping the market booming.
With the market stabilizing and a recent increase in homes for sale, the forecast for Denver is as bright at the weather so often is. The time to buy is now. Whether you’re looking to buy a third home or your first, we at First Option want to help. Fill out our Fast Response form or call our local Denver branch at 303-803-1900 now to receive quality information on purchasing, refinancing or financing options in the area. A skilled mortgage professional is here just for you!