The Denver Housing Market Forecast: What to Know for 2016

With lists such as 15 Reasons Why Moving to Denver is Great for Families by Movoto popping up almost daily, it’s time to accept that the secret is officially out: the Denver area is an incredible place to live!

From the natural beauty to the local culture, it’s no surprise to learn the Mile High City is among the top ten moving destinations in the country. Attracting out-of-staters while continuing to renew natives’ unyielding passion, the Mile High City’s housing market forecast has been on the rise for the past several years. However, will this trend continue in 2016?

Big Gains in 2015

Brandon Cornett at the Home Buying Institute wrote in an October 2015, “In 2015, some of the biggest home-price gains occurred in the western half of the nation. Cities like Denver, Colorado and many in California experienced double-digit gains in property values.”

In another Home Buying Institute article by Cornett from August 2015, the writer noted that the Case-Shiller Home Price Index report from July this year found that Denver house prices rose 10 percent from May 2014 to May 2015. “That was the largest year-over-year price increase of the 20 cities tracked by the index, and one of the largest annual gains nationwide. Denver even surpassed San Francisco (long considered as one of the hottest real estate markets in the country) in terms of annual price appreciation.” Furthermore, from April to May 2015, Mile High City home values increased 1.1 percent. That is very significant growth for a single month.

2016 Denver Housing Market Forecast

Although a higher number of new homes are being built in the Denver area, sales and closings are keeping pace with summer trends creating a 10% drop in the number of finished vacant houses on the market. Additionally, rising labor and supply costs are creating the lowest supply of new build vacant homes since 2006, according Denver Housing Overview by MetroStudy. As this trend continues investors will most likely see house prices rise and inventory numbers stay relatively low even with a continual rise in sales of new builds.

The resale market is also experiencing a very low inventory of available homes and a rise in overall cost. This tendency towards a low inventory is expected to continue as well as create a steady rise in the median cost of a home in the Denver Metro area as more people move into Colorado.

Therefore, despite a rise in starts and closings, the biggest hurdles to cross in 2016 will be an overall rise in home prices, a strong demand for new homes above $400k, and little to no finished vacant homes available below $250k.

What to Know When Buying a Denver Home in 2016

For first-time home buyers or empty nesters working with a limited budget, the Denver housing marketing might seem likely unfriendly territory right now. However, there’s no reason to give up your dream of buying a home in Denver. “If you’re a buyer and you’re committed to the process, you’re going to find something,” said Rael from the Denver Metro Association of Realtors in an April 2015 article from The Denver Post.

To successfully purchase your ideal home in Denver, staying organized and getting pointers from experts and other recent home buyers are crucial. Don’t be afraid to ask questions. Make a list of what you’re looking for in a new home. Do your homework – the better you prepare and educate yourself, the better your home buying experience will be in the long run. And, lastly, don’t let the high cost of a home purchase scare you away from taking the first steps towards owning your own home. It isn’t just a financial investment, it’s a chance to invest in your happiness and create new memories in your very own home.