Denver Home Prices Remain High, but Metro Area Rents are Beginning to Stabilize
The prices of Denver homes in the Metro area appreciated by approximately 10 percent in 2016. The current rate continues to outpace national home prices, wage increases and the overall rate of inflation for the last 5 consecutive years.
The Denver Metro Association of Realtors stated that:
“The average price of a home sold in metro Denver was $400,000 as the fourth quarter of 2016. But even with the current high prices of Denver real estate, the inventory of homes available for sale has remained relatively low throughout the year.”
The Denver City Council has responded to this issue by passing an affordable housing fund, the first of its kind for the city. The fund looks to use higher fees and property taxes from local developers to raise $150 million over the next decade.
Home builders have responded to the area’s population growth and growing employment opportunities, but they are building only a portion of the homes required by the current boom. Condo construction also remains significantly limited due to the construction defect rules. Efforts to loosen the state’s rules about this issue recently experienced another failed attempt in the legislature.
But developers continue to build apartments with alacrity, and their efforts have provided some respite for those who are willing to wait for the right opportunity to buy. Apartment rental increases hit double digits in the summer of 2015, but have since declined to less than 2 percent for the third quarter. This represents the smallest gain since 2010.