The end of a decade is always an excuse for reflection, and in Denver’s real estate market there is much to reflect on. The events of the last year alone are a lot to take in… luckily, Love Your Hood is here with your easy-to-digest 2019 Denver market highlight reel!
The Most and Least Expensive Denver Neighborhoods
Denver County as a whole saw a median home prices just over $442k last year. Flashback to 2010, Denver had a median price of $203k. This statistic has more than doubled since the decade started! Country Club topped the median sales price (MSP) charts in 2019, with a MSP of $1,164,000. Goldsmith took home the most affordable neighborhood position with an MSP of $177,500. Check out how the other neighborhoods stack up in affordability:
- Over 45% of Denver’s neighborhoods have an MSP of greater than $500,000.
- About half of Denver’s neighborhoods are in the $250k-$500k range, and
- Just 3.8% of neighborhoods had an MSP of less than $250,000. Tight budget = tough to find a home.
Map of Median Sale Price by Denver Neighborhood
This interactive map shows the city of Denver broken down by affordability of median sales prices. Scroll over a neighborhood to see its MSP for 2019, and use the buttons along the bottom of the map to share and see full screen. Read on to see Denver’s neighborhoods categorized in a few more useful ways!
Denver Neighborhoods that Appreciated the Most + Least in the Last Year
We ranked Denver’s hottest up-and-coming neighborhoods using historical price growth data. Topping the list for MSP growth in 2019 was Auraria at 28%, driven largely by the proximity to Union Station and low number of total homes in the neighborhood. Cherry Creek, Speer & Union Station (LoDo), three neighborhoods highly sought-after by homeowners and businesses, were also at the top. Notable as well is Marston and Elyria Swansea, two neighborhoods whose median sales prices fell under the Denver Metro MSP in 2019 but their MSP growth was near the top.
Source: Ben Casselman and Conor Dougherty of the New York Times
Competition from investors has made the already tough housing market even more difficult for first time home buyers. Anyone who has ever seen HGTV knows the appeal to flip homes has been glamorized and popularized, and now big time Wall Street investors have entered the game. Last year, investors bought one out of five starter homes in the U.S. This is pushing prices up rapidly in areas of future growth. Coupled with their ability to pay with cash and sit on homes until they are double in price, first time home buyers have an added competitor.
To hear more about where investors are honing in on homes, read the full article below.
Source: Carley Milligan and the Denver Business Journal Staff
It probably comes as no surprise that homes in Denver with a garage are selling at a higher rate than those without; but just how much higher? A whopping ten percent! For an average home in Denver, that’s roughly $35K extra for a roof over your car. For cities like Chicago, it’s an even more sought after commodity, where the snow fall (and lack of sunshine to melt it away) makes it less inviting to be outside and a real challenge to scrape off your car.
Check out the full article below for more information on where in the U.S. a garage will get you the most return!
U.S. New Home Construction Expected to Fall 300,000 Units Short of Demand This Year, More Pressure for Home-starved Markets Like Denver
Source: Joe Rubino of the Denver Post
The National Association of Home Builders forecast new construction at 909,000 homes in the U.S. — a whopping 300,000 homes short of their projected demand, based on data gathered from Redfin. In Denver, median home prices have been hovering around $500K, with homes still flying off the market soon after being listed. Labeling Denver as a “seller’s market” in today’s environment is quite the understatement.
The biggest factors behind the housing shortage:
The cost of lumbar has risen 62% since the start of last year. Why? Tariffs on Canadian softwood lumber have driven the costs of new construction up by roughly $9,000.
Another factor behind the supply/demand gap are local regulations, such as the banning of slot-homes in Denver. These types of structures previously allowed developers to maximize the number of units on a lot by turning them sideways.
People, especially Millennials, love Denver. And they’re coming here in droves. Although there are signs that Denver’s popularity is waning, is it enough to ease the demand and close the gap in the housing shortage?
In the meantime, developers are focusing on attached developments, namely town homes. Last August in Denver, around 30% of new residential construction on the market were attached homes. With a changing demographic, economic, and regulatory environment in Denver, it appears that town homes and new urbanism will increasingly become the norm.
Niche scoured through heaps of data to rank the best places for Millennials in Denver (and across the country). They looked for neighborhoods with a high percentage of young adults, college grads, access to coffee shops, bars, and restaurants, cost of living, and more.
Here are their rankings of the 10 hottest Denver neighborhoods for Millennials, a ballpark of what it’s going to cost you to live there, and the ease of getting around:
As people migrate back to city centers, it’s no surprise that all top 10 neighborhoods for Millennials on Niche’s list have an urban feel with high walk scores. The bigger question is: are these neighborhoods still affordable for the majority of Millennials or will many of them be priced out of the market?
Check out Niche’s site for a complete list of rankings and the details on their methodology.
Source: Tara Siegel Bernard of the New York Times
Throughout the US there are countless people who would love to buy a home, but continue to pay that rent check to their landlord every month instead. Why is this?
For the average aspiring homeowner, the largest obstacle to overcome is the down payment. Several companies, including San Francisco-based Unison, have found an opportunity in this challenge: shared equity.
Shared equity allows homeowners to split their down payment with an investor in exchange for a piece of the appreciation when the home sells.
How shared equity benefits homeowners:
- Increase buying power
- Retain some of your savings and buy a home
- Avoid costly private mortgage insurance and high interest rates
The average loan to value (the percentage borrowed to purchase a home) for a first-time homeowner is 92.6%. Homebuyers who borrow more than 80% of a home’s value upfront are seen as risky by lenders. Traditionally, they overcome this with unfavorable interest rates and mortgage insurance. Shared equity allows for buyers to afford a large enough downpayment to avoid these costs.
The downside? By sharing equity with a firm like Unison, a home buyer saves upfront but ends up giving up a cut of their proceeds from sale if their home has increased in value.
Regardless of whether you are the type to give up some of your equity to allow an outside investor to alleviate some of the capital-intensiveness of home buying, shared equity is catching on. Unison invested alongside 450 homebuyers last year, and they project to invest with roughly 2,500-3,000 more people in 2018.
Check out the full article to dig deeper into the mechanics of shared equity.
Rising interest rates along with the Federal Reserves recent rate hike announcements should help cool Denver’s crazy housing market, right? In reality it’s actually tightening it up a bit. Buyers are starting to feel pressure on their budget not just from rising home prices but now increasing interest rates are reducing their buying power. Month’s of inventory keeps decreasing as consumption keeps increasing. We suppose the old saying, “get em’ while they’re hot!” applies this summer.
$512,250!?! Yes, that’s exactly how we said it when we saw the median prices for single-family, detached homes. We surely thought it was a mistake in our computations, but just like Santa we checked it twice. Home prices have been climbing a proverbial 14er since January, where they’re up a whopping 15.1% from this time a year ago. Interest rates are trending up, but buyer demand is still strong with inventory trickling down to 1.2 months. The length of time it’s taking homes to sell took a dramatic dive down to 20 days, almost a week shorter than the previous month. 88 more homes sold in April compared with March, indicating demand is just waiting for new inventory to hit the market.
Source: Jon Murray of the Denver Post
Denver City Council unanimously approved zoning code changes preventing future development of sideways facing slot homes. The change has been a long time coming for some Denver residents but it will only affect future building permit approvals. There are several projects still in the pipeline that will be grandfathered in before the new zoning takes place. The change would require new developments to orient the building toward the street connecting it to the neighborhood better. Berkley, Jefferson Park, and West Colfax have the highest concentration of slot homes in Denver. They say a picture is worth a thousand words, in this article there are great before and after satellite views showing how the neighborhood has changed.
Source: Aldo Svaldi of the Denver Post
Denver’s popularity is in question for the first time in many years. After waves of people moved to the metro area in the last decade, the spark is starting to sizzle. Why? For many, it’s becoming too expensive and too crowded. Denver lead the way as the country rebounded from the Great Recession. Young workers flocked to Denver for job opportunities and recreation heaven. As the unemployment rate in the rest of the country has dropped, Denver’s luster is starting to fade. Median home prices are becoming out of reach, leaving natives and newcomers with thoughts of ditching Denver for greener pastures.