Will Denver’s housing market remain scorching hot in 2021? As the Denver Metro Housing Market continues to evolve, this blog will keep you up-to-date. While the Denver metro area remains a seller’s market, the August 2021 report indicates signs of balancing out, not cooling. Closings were down from July, while available housing inventory remained tight. Days in the MLS increased from 9 to 11 in August 2021. Similarly, the close-price-to-list-price ratio decreased month over month. Realtors say the changing market is good for both buyers and sellers.
The month-end active inventory fell 11.69 percent in a dramatic data point, according to a recent report released by the Denver Metro Association of REALTORS. Historically, the change in inventory between July and August has been relatively consistent. Buyers will have more time to evaluate houses as a result of these market trends, and there will be less competition in terms of the total number of offers.
According to DMAR’s report, even though month-end active inventory is historically low in August, this month’s report revealed that there are numerous opportunities. At this point in the year, there have been 5.76 percent more home purchases in the Denver metro area than there were at this time last year. Since the beginning of the year, buyers have continued to benefit from low-interest rates and an increase in days on the market. As a result, the Denver Metro area has sold over $5 billion more in sales volume this year than it did at this time last year.
The median price of a single-family home sold in August was $581,000, which was 3.15% lower than July’s median price and represents a 14,43% increase from last August. The average closing price was $687,768, a 1.29 percent decrease from July but a 14.26 percent increase from the previous year. The attached and detached segments both had close-price-to-list-price ratio averages of 102.02 and 102.78 percent respectively. A high list-to-sell ratio indicates a healthy real estate market in which buyers and sellers negotiate less over the sales price.
The competition in the Denver housing market remains fierce, and it is consistently skewed in favor of property owners across almost all price ranges. Homebuyers are paying thousands of dollars more than the asking price. According to DMAR, the Luxury Market (properties sold for $1 million or greater) remained strong overall in August 2021. The number of new listings fell by 18.56 percent, from 598 to 487, and the number of closed sales fell by 13.97 percent, with sales volume trailing behind with a lag of 12.65 percent. MLS’s average days on market increased by 71.43 percent from 14 days last month to 24 days this month, continuing the downward trend in numbers.
Overall, historical data in the Denver market show that an increase in inventory and a decrease in sales volume during the July-August transition are not uncommon. According to the DMAR Market Trends Committee, the supply-demand balance is expected to remain stable for the rest of the year due to the relative scarcity of inventories. Prices are expected to rise further in 2021 due to a severe shortage of inventory. In every price range of attached and detached properties, the Denver metro area remains a seller’s market.
The FMHPI is an indicator for typical house price inflation in the United States. It indicates that home prices increased by 12.24 percent in the Denver-Aurora-Lakewood Metropolitan Statistical Area in 2020. Growth has accelerated to 22.87% from July 2020 to July 2021 as a result of strong housing demand and record low mortgage rates. The current Freddie Mac House Price Index for Denver-Aurora-Lakewood MSA is 281.7 (July 2021).
10-year % Change in House Price Index: 164.26%
Annual % Change in House Price Index: 22.87%
Quarterly % Change in House Price Index: 6.52%
Monthly % Change in House Price Index: 2.03%
Although these stats are more extreme in metro Denver high demand continues to outstrip inventory across the Colorado housing market. It has increased the difficulty of finding a home to call your home. There are more buyers than there are houses, resulting in a seller’s market that continues to drive prices up. This trend is largely driven by low interest rates. According to the Colorado Association of Realtors, the median Colorado single-family home price topped $500k for the first time in April.
In August 2021, the median price in the Colorado housing market (statewide) was $520,000, up +15.6% year-over-year.
The Average Sales Price was $651,055, up 8.6%.
Percent of List Price Received = 102.1%.
Days on Market Until Sale = 243, down -44.2%.
Closed sales of single-family homes were down by 9%.
Months supply was down by 47.4% to 1.0.
Inventory of Active Listings dropped by 40.9%.
Denver Housing Market Trends 2021 (Describes August)
Data by DMAR. Forecast by Zillow.
The Denver Metro Association of REALTORS® (DMAR) published its August Market Trends Report which demonstrated that while it is a seller’s market in the Metro Denver area, closings decline as compared to the previous month and year. DMAR’s August 2021 report indicates a slowing of inventory growth while still providing an opportunity for burnt-out buyers to re-enter the market as seasonality takes hold in the area.
Metropolitan Statistical Area (MSA) reports show housing market statistics that focus on the Denver metro region with a relatively high population density at its core and close economic ties throughout the area. It includes Greater Denver Metro Area Counties: Adams, Arapahoe, Boulder, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park. Here are the numbers for July 2021 compared with July 2020.
ACTIVE LISTINGS
Historically, the change in inventory from July to August has been relatively consistent. However, as both inventory and new listings have decreased, the short-term “loose grip” on inventory has tightened once more. Months of inventory fell from 0.637 from the previous month. That means if no one put a property on the market for 19 days, there would be nothing to sell in the entire Denver Metro area.
HOME SALES
While August’s month-end active inventory is historically low, this month’s report revealed plenty of opportunities. In the Denver Metro area, there have been 5.76 percent more home purchases this year than last year at this time. Buyers continue to benefit from low-interest rates and an increase in MLS days, which has resulted in the Denver Metro area selling over $5 billion more this year than last year at this time.
With 413 new listings and 410 closed properties, detached homes had a good month in August. However, new listings fell 19.34% while closed sales fell 15.98% from 488 to 410. The good news in the detached market is that pending sales increased by 8.24% month-over-month, to 407 homes. The attached market beat to a different beat, with new listings down 13.95 percent to 74 and pending sales down 24.24 percent to 50 homes. The number of closed sales increased slightly from 49 to 52, resulting in a slight increase in sales volume.
MEDIAN SALES PRICE
(Residential) $535,000 represents an increase of 16.3% YoY.
(Detached) $581,000 represents an increase of 14.23% YoY.
(Attached) $375,000 represents an increase of 15.38% YoY.
AVERAGE SALES PRICE
(Residential) $614,577 represents an increase of 14.23% YoY.
(Detached) $687,768 represents an increase of 14.26% YoY.
(Attached) $437,655 represents an increase of 16.33% YoY.
Denver Market Trends Showing Month-Over-Month %Change
Source: DMAR
Housing Affordability in Metro Denver’s Real Estate Market (August 2021)
The effect of lower mortgage rates (for buyers) is being evened out by the rate of real estate appreciation. Because of the high prices and frenetic pace of the current market, many would-be homeowners are debating whether or not to jump into the purchasing game. The Denver Metro Area recorded a 14% annual gain in the median price of single-family detached homes sold in August. It has been more than a year since the pandemic shook the world. The rate of appreciation has doubled since then.
In August 2020, this rate was about 12%. Low mortgage rates help but don’t eliminate, the risk that the housing market could still face an affordability crunch if home prices continue to rise at a rapid pace. If the home prices continue to rise at this rate, many buyers would be priced out of the market. In August 2020, the median price of a single-family home sold in metro Denver was $510K, according to DMAR. And the average interest rate on a 30-year mortgage was around 2.94%, according to Freddie Mac.
Assuming a buyer provided a 20% down payment, the principal and interest payments on the mortgage would have been $1,706 a month. Contrast that with August 2021, where the median price of a single-family sold was $581K and 30-year mortgage rates averaged 2.84%. A buyer faced a payment of $1,919, or $213 more a month than August 2020. Now, assume that builders and sellers had met buyer demand, keeping prices flat over the year. Today’s interest rates would have resulted in a monthly payment of $1,685, or a savings of $21/month as compared to a year ago.
Not only Denver but the entire Colorado housing market is a hotspot to buy and sell real estate. Due to the surge in demand for homes, average prices for properties have increased in most regions throughout the state. Colorado Springs is in the strongest seller’s market that we have ever seen. Low inventory and ever-soaring prices continue to impact affordability. In July 2021, the median list price of homes in Colorado Springs, CO was $410K, trending up 16.1% year-over-year, according to Realtor.com. The median listing price per square foot was $186. The median sale price was $492K. Homes in Colorado Springs, CO sold for 1.35% above the asking price on average. The sale-to-List Price Ratio was 101.35%.
Denver Real Estate Market Forecast 2021-2022 (Latest Projections)
What are the Denver real estate market predictions for 2021 & 2022? Denver has a track record of being one of the best long-term real estate investments in the U.S. Let us look at the home price appreciation trends recorded by Zillow over the past few years. Denver’s strong economy gives buyers the ability to spend more on housing, consequently increasing real estate prices.
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 this area. But in 2019, it clearly experienced a cooling trend where home values appreciated by a mere 1%. The year ended with an average home price of $486,695 and a median of $420,000. This was up less than three percent from 2018, but up almost 90 percent from 2010.
Since 2012, the Denver City home values have appreciated by nearly 117% — Zillow Home Value Index. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Denver is currently $543,544. It indicates that 50 percent of all housing stock in the area is worth more than $543,544 and 50 percent is worth less (adjusting for seasonal fluctuations).
In June 2020, the typical value of homes in Denver City was around $480,000. Home values have gone up 13.3% over the last twelve months. Zillow Buyer-Seller Index (BSI) shows that Denver is currently the seller’s real estate 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 marketplace.
Similar growth has been recorded by NeighborhoodScout.com as their data also shows that in the past ten years the Denver real estate appreciated by nearly 109%. This amounts to an annual real estate appreciation of 7.7%, which puts Denver in the top 10% nationally for real estate appreciation. During the latest twelve months alone, the Denver appreciation rate has been at nearly 5.3%, and in the latest quarter, the appreciation rate has been 2%. If it remains steady, the annualized rate of appreciation becomes 8.24%. This figure also corroborates Zillow’s positive forecast of 16% for the Denver-Aurora-Lakewood Metro, so the home prices in this region are predicted to increase in the next twelve months.
Source: Zillow (Denver-Aurora-Lakewood Metro)
Here is the latest housing forecast for Colorado, Denver, Denver County, and Denver MSA until June 2022. The forecast for 2021 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 twelve months. If mortgage rates remain low, it will continue to bolster the home buying activity and pull the home prices up. For sellers, now is the opportune time to put their Denver home up for sale. The pricing of homes is trending higher and is more attractive for sellers in the current phase.
Denver-Aurora-Lakewood Metro home values have gone up 17.9% over the past year and Zillow predicts they will rise 16.1% in the next twelve months.
Denver home values have gone up 13.3% over the past year and will continue to rise in the next twelve months due to the supply-demand imbalance.
The typical value of homes in Colorado is currently holding at $$490,944. Home values have gone up 16.7% over the past year and will continue to rise in the next twelve months.
The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until June 2022.
Credits: Zillow.com
In conclusion, we can say that these numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? It is quite evident that the ongoing pandemic has not had any major impact on Denver’s housing market. Home sales & prices have created new records in the metro area. Low mortgage rates can only help buyers if prices remain flat this year. Otherwise, their monthly payments will increase with increasing rates. Denver Metro Area is still a strong seller’s market across the board except but the historically low mortgage interest rates are helping buyers as far as housing affordability is concerned.
In a balanced real estate market, it would take about six months for the supply to dwindle to zero. In terms of months of supply, Denver can become a buyer’s real estate market if the supply increases to more than six months of inventory. And that’s not going to happen soon. Months Supply of Inventory in the metro Denver housing market has dropped to 0.6 months — which is very low and a record low for July ever. Less inventory means home sellers have more power.
Therefore, in the long term, the Metro Denver real estate market remains strong and skewed to sellers, due to a persistent imbalance in supply and demand. The only segment of the market in which homebuyers have the edge is condos priced over $1 million. Nationally, the houisng market is breaking all the records despite the COVID-19 pandemic and the real estate sector has been one of the most resilient areas of the economy during the severe economic shutdown.
Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Denver in 2021 or 2022 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance.
Denver Real Estate Market: Is It A Good Place For Investment?
Should you consider Denver real estate investment? Many real estate investors have asked themselves if buying a property in Denver is a good investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2021. Denver is ranked as the country’s 16th-most walkable city, with 600,158 residents. It has some public transportation and is very bikeable. Downtown is the most walkable neighborhood in Denver with a Walk Score of 93.
As per Neigborhoodscout.com, a real estate data provider, 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, rowhouses, and homes converted to apartments. Single-family homes account for about 40-45% of Denver’s housing units. Denver ranked 13th for overall real estate investment and development, according to some 3,000 industry professionals surveyed and interviewed by the Urban Land Institute and PwC. Survey respondents viewed Denver’s housing market even more favorably, collectively ranking it ninth overall.
Of greater importance to real estate investors in Denver is that the area is growing in population. The jobs are increasing and so are the number of renters. It is the largest and capital city of Colorado, home to roughly 700,000 people. The Denver metropolitan area is home to around 2.7 million people. The population has increased by 1.33% from 2019. The Denver-Aurora, Colorado statistical area is home to about three and a half million people. It has a low unemployment rate of 2.3% as of Dec 2019, according to the U.S. Bureau of Labor Statistics. A third of the population of the Denver metro area rents.
All these are excellent signs of investors looking to buy a rental property in Denver. Despite the recent cooling off, there are several reasons to consider a long-term investment in the Denver real estate market. Shortage of housing for a growing population, a strong economy & increasing jobs have been fueling the demand in the Denver housing market for the past many years. Denver is a key trade point for the country, and home to several large corporations in the central United States. It was named 6th on Forbes Magazine’s “Best Places for Business and Careers.” Denver South is home to 7 Fortune 500 companies. It is also home to mining and energy companies such as Halliburton, Smith International, Newmont Mining, and Noble Energy.
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. We’ll address the biggest factor pulling people to the Denver housing market next.
Denver’s 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 the mountainous landscape than on flat plains. In Denver’s case, the massive national forests and Rocky Mountain Park to the west of Denver and its suburbs prevent the expansion of the Denver housing market in that direction. This keeps home prices higher than they’d be in places like Dallas.
The residential median home price in Denver hovers around $530K. That’s a steal for the migrants from California, but the sheer numbers of them coming in is pricing locals out of the housing market. The 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 a 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.
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. U.S. News & World Report published its list of the “150 Best Places to Live in the U.S.,” and four of the top five cities are right here in Colorado: Boulder (1), Denver (2), Colorado Springs (4), and Fort Collins (5). Denver was the second-best city to live on that list.
The area was a little lower on value than many like, but it ranked high on jobs, quality of life, and desirability. It is a beautiful city to live near the mountains – located on the western edge of the exquisitely beautiful High Plains. It is exactly one mile high above sea level and has the largest city park system in the nation, with 14,000 acres of mountain parks and 2,500 acres of natural areas.
That isn’t enough on its own to draw huge numbers of people to the Denver real estate market, but it is a factor. It has become the 19th-most populous city in the nation. The current metro area population of Denver in 2020 is 2,827,000, a 1.33% increase from 2019 (Macrotrends.net). Denver was ranked as a Beta world city by the Globalization and World Cities Research Network. It has been one of the fastest-growing major cities in the United States, and real estate investments provide a direct way to participate in the strong growth of these economies. The strength of the overall economy significantly impacts the real estate market.
Denver’s Strong Economy & Jobs Boost Its Real Estate Market
Job growth directly affects the real estate market. Demand for all types of real estate increases with the number of local jobs, as during periods of economic development or boom. Jobs are a major reason why people move to Denver in the first place. The Denver area’s unemployment rate is less than 3%. Denver’s unemployment rate has been well below the national average for years. The unemployment rate was 2.3% as of Dec 2019, according to the U.S. Bureau of Labor Statistics. The average weekly wages for all industries in Denver Area are $1,265 (the U.S. = $1,093).
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. Due to its proximity to the mineral-rich Rocky Mountains, Denver has long been a home for mining and energy companies such as Halliburton, Smith International, Newmont Mining, and Noble Energy. The top 25 employers in Metro Denver include government and municipal organizations, and corporations.
Denver Technological Center, better known as The Denver Tech Center or DTC, is a business and economic trading center located in Colorado in the southeastern portion of the Denver Metropolitan Area, within portions of the cities of Denver and Greenwood Village. It is home to several major businesses and corporations. The U.S. Government is the largest employer in Metro Denver. The Department of the Interior includes such agencies as the Bureau of Land Management, Office of Surface Mining and Reclamation, Bureau of Reclamation and all have offices in or near the Denver Metro area. Another top employer in the Denver Metro Area is the State of Colorado.
It employs nearly 30,000 people in the Denver Metro area. As the capital and largest city in the state, Denver hosts the State of Colorado in multiple locations. Centura Health is one of the top 25 employers for the metro Denver area. Its massive health care network includes 15 hospitals, eight affiliate hospitals, health neighborhoods, health at home, urgent care centers, emergency centers, mountain clinics, 100 plus physician practices, and clinics and Flight for Life Colorado.
Denver’s 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.
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. Key trade point for the country – Denver is home to several large corporations in the central United States. Denver South is home to 7 Fortune 500 companies. Denver was named 6th on Forbes Magazine’s “Best Places for Business and Careers.” Home for mining and energy companies such as Halliburton, Smith International, Newmont Mining, and Noble Energy.
Denver’s 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 attract 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. Additions to the local labor force tend to drive rents and prices up on properties in the vicinity and results in local construction of homes and apartments. That will propel the Denver real estate market for decades to come.
Denver Rental Market is Very Big
A third of the Denver metro area rents. 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. The sheer demand for housing stock is making it profitable to break up large homes into multiple apartments. Denver remains more expensive than other Colorado cities, including Fort Collins and Colorado Springs, and other major metro areas such as Phoenix and Charlotte, but considerably below California-based rent leaders and more.
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 Has A Large Student Population For Rental Homes. 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 scares off students or simply fails to attract them like many classics, private liberal arts schools who found themselves rendered redundant after brand name schools opened their doors, there’s less demand for the rental of 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 the 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.
The pandemic is likely to change the expectations and behaviors of renters for an extended period of time. In Denver, rental prices for apartments will likely remain stable during the first half of 2021. Rents will likely see an increase in rent prices in the second half of the year.
Denver Rental Market Trends 2021
Dense urban areas are seeing weaker rental prices and drops in average rents, while some suburban sunbelt areas project small increases in rents. The main reason being working people relocating to less expensive and less dense areas. The August 2021 Rent Report from Apartment List reveals that Denver rents increased over the past month. Rents have increased 3.1% over the past month, and have increased sharply by 8.8% in comparison to the same time last year.
Currently, median rents in Denver stand at $1,418 for a one-bedroom apartment and $1,738 for a two-bedroom. This is the sixth straight month that the city has seen rent increases after a decline in January. Denver’s year-over-year rent growth lags the state average of 11.6%, as well as the national average of 10.3%. Rent hikes have occurred not only in Denver but throughout the whole metro area, during the last year. All of the biggest ten cities in the Denver metro area for which Apartment List has data have witnessed price increases.
Here’s a look at how rents compare across some of the largest cities in the Denver metro.
Parker has seen the fastest rent growth in the metro, with a year-over-year increase of 17.3%. The median two-bedroom there costs $2,036, while one-bedrooms go for $1,796.
Arvada has the least expensive rents in the Denver metro, with a two-bedroom median of $1,561; rents grew 3.5% over the past month and 9.8% over the past year.
Lone Tree has the most expensive rents of the largest cities in the Denver metro, with a two-bedroom median of $2,369; rents increased 3.5% over the past month and 16.7% over the past year.
Compared to most other large cities across the country, Denver is less affordable for renters.
Rents increased sharply in other cities across the state, with Colorado as a whole logging rent growth of 11.6% over the past year.
For example, rents have grown by 16.9% in Colorado Springs and 7.1% in Fort Collins.
Denver’s median two-bedroom rent of $1,738 is above the national average of $1,219.
Nationwide, rents have grown by 10.3% over the past year compared to the 8.8% increase in Denver.
While Denver’s rents rose sharply over the past year, some cities nationwide saw decreases, including San Francisco (-6.8%) and DC (-1.8%).
Renters will generally find more expensive prices in Denver than in most similar cities.
For example, Charlotte has a median 2BR rent of $1,348.
As of October 2, 2021, the average rent for a 1-bedroom apartment in Denver, CO is currently $1,710. This is a 22% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Denver increased by 4% to $1,395. The average rent for a 1-bedroom apartment increased by 7% to $1,710, and the average rent for a 2-bedroom apartment increased by 5% to $2,150.
Two-bedroom apartment rents average $2,150 (a 13% increase from last year).
Three-bedroom apartment rents average $2,650 (an 11% increase from last year).
Four-bedroom apartment rents average $2,900 (a 12% increase from last year).
The Zumper Denver Metro Area Report analyzed active listings in August 2021 across 10 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Colorado one-bedroom median rent was $1,403 last month. Westminster ranked as the most expensive city with one-bedrooms priced at $1,650 while Greeley was the most affordable city with one-bedrooms priced at $920.
The best place to buy rental property is about finding growing markets. Cities like Loveland & Lakewood are good for investors looking to get started with rental property ownership at an affordable price. These trends provide a macro look at the growing rental demand. Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present their own opportunities for investors.
These cities look good for rental property investment this year as rents are growing over there.
The Fastest Growing Cities For Rents in the Denver Metro Area (Y/Y%)
Lakewood had the fastest-growing rent, up 14.3% since this time last year.
Westminster saw rent climb 13.8%, making it second.
Loveland ranked third with rent increasing 11.6%.
The Fastest Growing Cities For Rents in the Denver Metro Area (M/M%)
Boulder, Denver & Arvada had the largest monthly growth rates, all up 4.8%.
Littleton’s rent climbed 4.6% last month, making it the second-fastest-growing.
Greeley was third with rent increasing by 4.5%.
Source: Zumper Denver Metro Area Report
Denver 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.
Denver Colorado Real Estate Investment Markets
Investing in Denver’s real estate can be a worthy investment due to a steady rate of appreciation. There are many reasons why the Denver real estate market is going strong today and is certain to remain strong for years to come. You cannot afford to miss out on this growing and appreciating real estate market. Good cash flow from Denver investment properties means the investment is, needless to say, profitable.
On the other hand, a bad cash flow means you won’t have money on hand to repay your debt. Therefore, finding a good Denver real estate investment opportunity would be key to your success. Even as Denver home prices have reached new heights, the market remains attractive to residential real estate investors in the $300,000 to $399,000 price range. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain.
The homebuyers won’t be able to outbid real estate investors and would end up renting. The high prices combined with the lack of higher gains have slowed down fixing and flipping investment properties in Denver. The best investment is now looking for a rental property that will generate good cash flow. Your best tenants would be the retirees who intend to relocate to Denver and want to purchase property to rent out. The three most important factors when buying real estate anywhere are location, location, and location.
The 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 property and you should be able to 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.
Some of the popular neighborhoods for buying a house or an investment property in 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.
Denver housing prices are not only among the most expensive in Colorado but they are also some of the most expensive in all of the United States. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals such as duplex and triplex in Class A neighborhoods. 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.
The inventory is low, but opportunities are there. According to Realtor.com, there are 69 neighborhoods in Denver, where properties are available for sale. If you think of investing in Denver, you have decided on a long-term investment property. Here are the ten neighborhoods in Denver having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
Sandown
Smith Rd / Havana St
W Colfax Ave / Irving St
Yeshiva Toras Chaim Talmudical Seminary / W Colfax Ave
Federal Blvd / W 8th Ave
E 35th Ave / York St
E 40th Ave / Steele St
E 26th Ave / York St
W Colfax Ave / Broadway
Santa Fe Dr / W 8th Ave
Colorado Springs is another sizzling hot market for real estate investment in 2020. The Colorado Springs real estate market contains several large populations of renters, many practical reasons for people to move here from the surrounding area and across the country, and long-term factors that will drive growth for years to come. Forget the Mile High City and invest in the Colorado Springs real estate market.
Aurora is a fairly large city on the east side of Denver. Its proximity to Denver has long kept it in the realm of the Denver suburb. The Aurora real estate market 2020 is seeing rising prices & rents. Aurora, Colorado is more than a growing suburb. It is a large, thriving city in its own right. It has a bright future, and it is poised for rapid appreciation and increasing rental rates. This is a good time to invest in the Aurora real estate market.
Boulder real estate market is another good place to buy investment properties. Boulder is located in northern Colorado. The Boulder metro area is becoming a high-tech hub, driving up rental rates and property values. Others are lured here by the promise of high-paying jobs or attending school somewhere they can intern at Big Tech firms without paying a fortune. Boulder’s economy is stabilized by the presence of government research institutes and the proximity to Denver’s buzzing economy.
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 areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Denver, Colorado.
Consult with one of the investment counselors who can help build you a custom portfolio of Denver turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Denver.
Not just limited to Denver or Colorado but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Denver turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Let us know which real estate markets in the United States you consider best for real estate investing!
Please do not make any real estate or financial decisions based solely on the information found within this article. Some of 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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US. This article aimed to educate investors who are keen to invest in Denver real estate. Purchasing an investment property requires a lot of study, planning, and budgeting. Not all deals are solid investments. We always recommend doing your research and take the help of a real estate investment counselor.
REFERENCES:
Market Data, Reports & Forecasts
https://www.recolorado.com
https://www.dmarealtors.com
https://www.zillow.com/denver-co/home-values
https://www.littlebighomes.com/real-estate-denver.html
https://www.recolorado.com/market-statistics/market-watch.aspx
https://www.realtor.com/realestateandhomes-search/Denver_CO/overview
Best Neighborhoods for real estate
https://www.neighborhoodscout.com/co/denver/real-estate
Foreclosures
https://www.realtytrac.com/statsandtrends/co/denver-county/denver
Quality of life, Unemployment, Rent, Tourism
https://realestate.usnews.com/places/colorado/denver
Landlord friendly
http://www.landlordstation.com/blog/top-landlord-friendly-states
https://www.avail.co/education/laws/colorado-landlord-tenant-law
Short term rentals
50% of Airbnb landlords ignore Denver rules in booming $100M industry
Growing rental market
Everything You Know About Denver’s Real Estate Market Is Wrong
https://www.forbes.com/sites/ingowinzer/2016/07/31/should-you-invest-in-denver-area-real-estate/#16f926277fc5
Redevelopment
https://denverinfill.com/home-old.htm
Colleges
https://www.collegesimply.com/colleges-near/colorado/denver
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