Denver Single Family House (SFH) Market Report: Is Denver's Market Healthy?

Written by Posted On Friday, 18 December 2020 10:29
Is the Denver Market Healthy Is the Denver Market Healthy https://watsonbuys.com/

The health of the Denver Real Estate Market is one of hot debate.

2020 has provided us all with a roller coaster of emotions. These emotions are driven hard by global pandemic and how it affects us and our families and friends. There have been many sad stories, however, some hope and happiness also. With the health of the world turning maybe with the release of 2 vaccines I wanted to bring it closer to home and talk about the health of Denver's real estate market. 

DISCLAIMER: These are my humble opinions as a full-time real estate investor of 14 years in Denver. I have properties in Indianapolis and Tampa also so feel I have an interesting perspective and comparisons to draw on.

If you are short on time here is my final thought...

The Denver real estate market is healthy albeit extremely competitive. You can move on with your day now. OR...

You can dig in a little deeper to see how I concluded that for myself. 

How did I determine the health status of the Denver Housing Market?

The first thing I look at the real estate cycles. My thoughts...What goes up must go down, and in real estate then will go up again.

We have had a wonderful run-up period. Looking back at previous market reports we see continued growth. The trajectory has been seen before (it's not out of the ordinary)

The appreciation came after a very low point so, in hindsight, makes sense, right?

Secondly, I look at migration into the state. Is Colorado growing? Yes YESY and Yes. Colorado has been growing at a healthy rate for many years and is predicted to continue for many more. 

Also not only are people moving here, but also many companies, which bring more great jobs.

The third thing I like to think about is why people would move here. Are there good reasons to move here? And again I answer yes. Yes, there are great reasons to move to Denver and Colorado. People are choosing lifestyle over workstyle more and more. The beauty of Denver is you get both. There is plenty of opportunity in any industry and outdoor activities in every direction. 

There are other factors too, however, these are three reasons, that we can easily measure, that I like to talk about with family and friends. 

So What are some actual numbers?

What is the average cost of a house in Denver now?

The average price of a sold single-family home for November 2020 was $615,766.

Once again this was an increase on the previous month. 

What will house prices be in Denver in the future?

The future of Denver house prices is a much harder question to answer. For this, I turn back to real estate cycles. We went really low 2010 timeframe. Since then we have steadily increased. Now we are really high. What could keep it high?

  • Low-interest rates (predicted to stay low for a year at least).
  • Low inventory (predicted to stay low also - building rates down and net positive migration)

What could send it down?

  • Increasing rates of unemployment
  • Global pandemic continuing
  • Public perception

Let's discuss the second two.

According to health authorities, the vaccines released are very promising. If it is good as they say many experts believe the virus will be in our rearview sooner than later.

What do I mean by public perception? Pure and simple it means are people willing to continue to pay more and more for a house in Denver. For the near future, I believe so.

What is happening in 2 years' time to Denvers house prices?

I firmly believe in a softening. I base this on cycles, and the pandemic backlash, that I don't think we have felt. I don't think house prices will drop off a cliff and I will continue to look for good properties to buy over the next 2 years and beyond.

Why does inventory remain so low in Denver?

Builders aren't building, maybe regulations, definitely due to materials cost. Did you know that the global pandemic caused the cost of lumbar to skyrocket? The pandemic caused the supply to drop. Supply down, demand the same means prices go up. Things you may not have thought about. 

As building materials are more expensive it doesn't make much sense to build lots of houses. Unless of course, house prices keep appreciating. 

Is the Denver real estate market healthy?

My humble opinion is yes. The Denver market is healthy because it's acting as one would expect under current circumstances.

Low-interest rates, low inventory, net positive migration and it remains within a path of normal cycles.

So, should I buy a house now in Denver?

This answer is really short and to the point.

Yes, but be patient. 

I really hope you got something from this. Please feel free to comment. 

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Shaun Martin

Denver Based Real Estate Expert

Hi there. My name is Shaun. My team and I have been investing in the Denver Real Estate market since 2007 where we buy houses Denver directly from the homeowner and we buy directly because it saves the owner lots of money (no fees or commissions), makes selling to us really fast and you can sell your house as-is (no repairs - which in today's market most buyers want it move-in ready, right?).

To Recap with Watson Buys you can:

  1. Sell directly to us
  2. Sell your home without doing any repairs
  3. Sell your home quickly

So who am I?

My first deal was a single-family house in Denver, CO. It is in a neighborhood called Montbello.  I still own it in fact. It has been a great property. I must admit, when my wife and I bought it, we were nervous as hell!

After purchasing this house in Denver, we fixed it up and rented it out. It has been a great rental ever since!

Subsequently, we have expanded our little business to other cities.

Now we buy houses Indianapolis, Indiana which is a fabulous real estate market. The people are so nice! I have added a number of rental properties in Denver, CO, Port Richey, FL, and Indianapolis, IN.  

I find new rental properties (best off-market deals in Denver)

I am not a get rich quick guy. I am not an aggressive investor.  I believe in mutual benefit to all people involved in each deal I do. I am a believer in cycles. What goes up must go down - and then it will go right back up again. AND

Because of that, I believe that as long as you sell when you want to, in real estate, you will do great. 

Real Estate has given me the opportunity to create security for me, my family and friends, and more importantly, time to enjoy it. 

https://watsonbuys.com/

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