The Denver real estate market saw an expansive growth of slightly over 9% in the first quarter of 2016 compared to the same period in 2015. This is not an isolated statistics, but rather part of the robust growth this real estate market has enjoyed over the last few years. On top of this, investors and homebuyers are poised to enjoy high property values thanks to favorable price growth forecasts in Colorado where home prices are expected to more than double the national average in the coming 12 months. This is data gathered from the National Association of Realtors.
Apart from the above, there is another component that is lighting the real estate market in Denver and that is home equity gains. The national average in home prices is $215,767 and Denver real estate is experiencing tremendously higher rates of appreciation for homes which is good news for real estate investors.
Data obtained from Trulia places the worth of Denver homes at an average of $314 per square feet. This is a 14% increase over the same period in 201. Since the recession, principal payments and price appreciation has significantly boosted total equity growth. For instance, the past 3 years which is the equivalent of 12 quarters has seen houses appreciate by 41.3% which is almost double the 22.6% national average.
Affordability of Homes in Denver
Despite the continual gains in home prices, there is one factor that is favoring the Denver real estate market and this is affordability. Compared to most markets, Denver is more affordable. To support this, research indicates that the average homeowner in Denver spent approximately 13.9% of their income on mortgage payments while the rest of the country spent slightly less than 14.5% of their total income.
The price to income ratio in Denver is also a favorable indicator to homebuyers. In the first quarter of 2016, this ratio was at 2.5 which is 0.1% lower than the national average.
Generally, home values in the United States fell drastically from 2007 where they had attained an impressive peak to their lowest in 2011. This caused many homeowners to go underwater on their mortgages because they now owe much more than what their homes are worth. Zillow reports that the percentage of homeowners in Denver who are underwater on their mortgages is just 0.1%.
The number of foreclosure filings recorded in 2016 dropped by 34.9% according to CoreLogic. In the 12 months ending May 2016, the total completed foreclosures were 1031. The decrease in auction activity combined with the rising distressed property values will certainly benefit the non-distressed sellers in the Denver real estate market.
The final boost to this market is the growth in local employment in Denver. Compared to the national average, the Denver job growth rate over the past 12 months has been put at 3.1% while the national average is at 2%. The current unemployment rate is 3.35, which again is far much better than the 5% national average. So far in 2016, this market has been voted one of the most stable in the US.