As I have been relentlessly preaching recently, Denver's real estate market is coming back. But this normally raises the question of "where is the hottest place to buy right now?". It is one thing to be in the industry a see this on a day-to-day basis, or to have a friend at work recommend ______, but to actually be able to visualize it is another. Below is a heat map of the 12 month change in estimated value (I pulled this just now, so it is current as of 6.23.12 @ 10:45am):
Here is how the map breaks down:
While there are clearly smaller pockets on the map, the areas that I want to highlight as the hottest in Denver are the closest suburbs to downtown. For the last decade or so, we have been seeing a lot of reurbanization (may have just made that term up). By this I mean that people are moving from the distant suburbs, trading in their 2,500sf+ home, and downsizing along with the desire from my generation to live in urban centers. The increased values in these areas can be attributed both to new commercial ventures, renovations being done on the homes and a spike in demand.
Factor in the charm of the homes and the areas, and it is easy to see why people are making the move. Boutique shops, parks, mass transit, events, bike trails and more social interaction with your neighbors are all key reasons why we are seeing Highland, Five Points, City Park, Park Hill, Baker, LoDo & Riverfront start to boom again.
If you live in one of these areas, I'd love it if you would share what you like about it below. Thanks for reading.
For what seems like as long as I can remember (5 years, they say I have amnesia), the real estate market has been dubbed a "buyer's market". Low-ball offers, plenty of properties to choose from, low prices, low interest rates, short sales/foreclosures, seller concessions toward buyer's closing costs and more or less getting exactly what they want. Oh how the times are changing. Gone are the days that buyers get whatever they want, and here's why: - Inventory (homes currently listed for sale in Denver) is down 53.4%. If all of the other variables were constant (which they aren't), this alone would have the pendulum swinging back toward sellers.
- Average Days on Market (DOM) has dropped by 11.7% from March 11 to March 12. What properties are currently available are going more quickly than they did last year.
- Both the average price per square foot and sold price/list price are up (4.9% and 2.9% respectively) indicating both value increases as well as higher priced inventory entering the market.
- The absorption rate (how long it would take to sell all current listings if no others entered the market) is also down substantially (as should be expected with such a drastic decrease in inventory), 55.3% year over year. So if no new listings enter the market, buyers will only be able to get property for another 3.8 months in Denver.
- Mortgage interest rates are still the lowest they have ever been. While I don't claim to be able to predict where rates will go, I do know that inflation is currently in the neighborhood of 5.2% and that my lender quoted FHA 30-year fixed rates yesterday at 3.75%. If rates increase, let's say .5%, a buyer with a maximum purchasing power of $200K is going to see an increase of approximately $100 on their monthly payment, thus decreasing the potential buyers for a given property.
I'm not saying the real estate market is saved, but what I am getting at is that it is getting very competitive to buy real estate in Denver, at all price points, and competition leads to increases in closed prices, so if you have been on the fence about buying or selling, now might be the perfect time to do either.