In the past few years, Denver area homes have been selling at record speed, even as prices rise to unprecedented levels. Amidst the frenzy, some potential buyers have begun worrying that the market is peaking and that to buy now would be a mistake.
But there are at least four solid indicators to show that Denver home values will continue to appreciate in 2016.
Let’s take a look:
Population: Colorado’s Front Range has become a hot destination for young workers starting their careers and for those looking to relocate. Last year alone, Colorado added 101,000 to its population. According to the Denver Post, that was a 1.89% increase over the previous year, more than double the 0.79% increase in the overall U.S. population. This population surge will continue to fuel demand for homes.
Employment: In 2015, Colorado showed the biggest percentage drop in unemployment in the country. According to the Denver Post, the state added 62,300 jobs, with the unemployment rate decreasing from 6.2% to 4% (3.8% in metro Denver). While oil and gas woes will impact employment in the state, that sector is a small part of our overall economy. An employed population will power demand for homes.
Inventory: Last year, the supply of homes in Denver reached record lows. In December, there were 4,384 active listings, contrasted with an historic average of 13,869 active listings in December. Unless a significant change occurs in inventory, demand will remain high.
Appreciation: Experts predict further home appreciation in Denver in the coming months. Real estate valuation and data company Clear Capital, for example, projects Denver-Aurora home values to rise another 7.7% this year.
In short, there are many reasons to believe that the housing market has not reached its peak and will remain hot.