We hate to use a clichéd metaphor but the metro Denver residential real estate market is pretty much like a broken record.
For three years now, we have been seeing the same outcome: Prices going up at double digit rates – more sales occurring – inventory staying historically low.
In April, it looked like this:
- Home prices were up by 9% to 12% compared to April last year.
- More properties changed hands this April versus last April – almost 4% more.
- Inventory remained similar to last year. We ended April with just 41 fewer homes on the market than were on the market when April ended in 2016.
The reason for this consistent pattern is that fundamentals have not changed. For the last three years, we have seen:
- Lots of people moving into metro Denver
- A strong local economy
- New homes and rental units being built at a rate 40% below what is needed to accommodate new Coloradans
- Low interest rates that make home buying attractive
- High rental rates that make it better to be a homeowner rather than a tenant.
Nothing predictable is on the horizon to change those fundamentals significantly. Interest rates will likely rise a bit and building may pick up slightly. These factors might slow price appreciation from 10% annually to 6% or 7% per year.
With little to change the underlying realities, our broken record market will likely keep playing the same part of the current song for the foreseeable future.
Here is a summary of several market parameters for April 2017 compared to April of 2016:
You can see a more extensive breakout between the single family and multi-family segments of the market by clicking on the links at the end of this post.
If you like the look of those reports, we can produce one for you that is specific to your zip code and property type. The market is not uniform. Your part of town may be doing better or worse than the metro-wide averages.