Of all the housing markets in the US, the Colorado housing market bounced back the quickest following the aftermath of the housing bubble, recession, and economic downturn of 2008. Denver’s metropolitan housing market perfectly illustrates the entire state’s positive outlook for both 2014 and the following twelve months. In spring 2013, Denver experienced a regular price boom which experts partially accredit to the massive number of foreclosures on the market at the time. Other factors influenced the growing real estate market of the first quarter Q, 2013. These factors include the historically low rates on mortgages as well as the sparse housing stock. Denver was a decidedly seller market at the time. However, In early 2014, however, real estate analysts began forecasting a far more balanced picture for the 2014 Colorado Housing Market. Experts predict further price increases but in smaller increments.
Denver experience a massive increase (26.3 percent) in the number of closed home transactions in 2013. The median price of homes sold also increased by an impressive 10 percent. At the time, buyers went into a frenzy of sorts. They could no longer call the rules of the game in home sale negotiations. Slow-trickling transactions suddenly picked up in pace. Bids began to pour in left and right. Home prices climbed to new levels and the spectrum of higher mortgage interest rates loomed on the horizon. In fact, the number of 2013 home sales in Denver’s metropolitan area surpassed the previous records set during the infamous real estate bubble. The value of closed home transactions, median prices, and average prices on homes also followed suit. Find out more about Colorado’s housing market last year here.
The housing inventory for the 2014 Colorado housing market in Denver actually diminished by a small margin. Real estate market analysts don’t expect another explosion of price and home value this year. The market holds fewer homes for sale in 2014. Several other factors will likely put a damper on buyer enthusiasm:
- Though still relatively low, mortgage interest rates increased since early 2013. Buyers expect to see increasingly tighter lending conditions. But, for some, the proverbial ship already sailed. They are no longer pressured to purchase a home simply because they can no longer afford a mortgage.
- Much of the same can be said for housing prices. Long gone are the days of the historic lows recorded in Denver (and all of Colorado for that matter). In fact, housing prices in most areas of the Denver metro regained their old highs. Market researchers actually expect the scales to tip in favor of the sellers in 2014. This shift should increase the housing inventory and further relieve the market of some of that ‘buy now!’ pressure seen in 2013.
- At first glance, more expensive homes will constitute a significant deterrent for potential buyers. As some analysts pointed out, homes with higher values are also less likely to depreciate in value as quickly. This continued appreciation will encourage buyer confidence.
- Current trends in the ratio of available housing inventory per month to number of homes sold per month indicate that the market in Denver (and Colorado in general) is headed toward more stability in 2014 and beyond.
As of July 2014, data provided by Zillow shows the median home value in Colorado at a healthy $250,500. The current housing values are consistent with the same upward trend that the state witnessed over the past twelve months. All in all, these values increased by 8.7 percent. Online real estate experts expect this trend will continue to increase by 2.9 percent over the coming year. House values, listing prices and sale prices remained at a sustained increase since April 2011 and November 2009. April 2011 markets the time when the median listing price hit rock bottom at approximately $239k, and November 2009 signifies the time when the median sale price experienced its lowest rate of $209k.
The Colorado median for listed prices per square foot stands at $164 as of July 2014. The median home price stands at $306,995. Since listing prices are typically higher than actual selling prices, we shouldn’t be surprised by the fact that the median price of housing units sold stands at a comparatively lower $262,025. The real estate portal cited above also indicates that the state of the Colorado market is ‘very healthy.’ The 2014 Colorado housing market currently holds an index of 79 points as of June 2014. This number marks a 9.1 point increase on a month-to-month basis. On average, listed houses spend 79 days on the website (as of the end of the year’s first semester). The ratio of homes with negative equity in Colorado (13.8 percent) stands well below that of the national average (18.8 percent across the US) as of March 31, 2014. What’s more, the ratio of mortgage delinquencies only stands at 3.3 percent (compared to the 7.2 percent national average). The number of homes foreclosed per 10,000 stands at a meager 3.4. This figure is substantially lower than the 4.4 recorded at the U.S. level.
The Zillow Housing Value Index predictably placed Denver at the top of the list with a median housing value of $276k. Lakewood closely follows the state capital at $274.9k. Fort Collins stands at third with a median of $271.8k. Pueblo stands at the opposite end of the spectrum with a meager median housing value index of $115.3k. In terms of listings and sales, the situation appears positive: the difference between the median listed price per square foot and the median sale price per square foot is of only $4 (or $164 compared to $160). And while a relatively large number of home listings have taken a price cut since first hitting the market (30.7 per cent), as of July 2014, only 11.2 percent of homes sold below this listed price.
As of July 31st, 2014, the rental market in Colorado also appears to be quite a bit healthier and more prosperous than in the rest of the U.S. Zillow rates Colorado’s Rent Index at $1,527. This number is substantially higher than the countrywide $1,318. The median rent listing price was $1,350 with a list price per square foot of $1.22. We should note that Zillow’s rental price index for Colorado has constantly increased since 2011. Colorado has yet to experience any spikes or downward movements during this time.