The Denver real estate market continues to expand and evolve. This region of the country is now one of the fastest-growing for a variety of reasons. There’s been a lot of national attention lately on the rapid growth of the west. Let’s explore some notable trends in the Denver real estate market as well as some of the compelling reasons that so many people are moving there.
Denver Housing Market Trends
As with any region, the Denver real estate market has its own quirks. Here are some of the leading trends of recent years.
- Luxury Homes – One of the biggest trends is the rapid growth of high-end real estate market in Denver. In May 2017, 179 Denver homes priced at $1 million and more sold and closed. Low inventory has been pushing prices upward for the last few years.
- Rising Rents – Rents are also going steadily upwards. A recent report from Apartment.com reveals that Denver rents rose sharply for four consecutive months in 2017. These numbers are a strong indication that luxury real estate in Denver is rapidly increasing in popularity.
- Demand Exceeds Supply. One of the factors that’s contributing to rising prices is the difficulty of keeping up with demand. In December 2016, the average price of a Denver home was $434,421.
- Suburbs are Growing Even Faster Than Downtown – While most attention on Denver is on the downtown area, the suburbs are also rapidly expanding. In fact, population gains in several suburbs are outpacing Denver itself. Lone Tree, Commerce City, and Broomfield are growing especially fast, with Lone Tree leading the way with a 17 percent increase in population between 2010 and 2015. This is actually representative of a wider trend in the United States, as population growth has been shifting to suburbs in recent years. Denver, of course, has a thriving downtown district as well as many growing suburbs.
- Millennials are Coming – Denver appeals to millennials for a variety of reasons: job opportunities, a thriving nightlife, an active lifestyle, and, for some, legalized marijuana. For these and other reasons, millennials are a major part of the city’s rapid growth.
- Appealing to Retirees – At the other end of the spectrum, Denver also appeals to retirees looking for an appealing climate, walkable neighborhoods, and lots of cultural attractions. Many older people prefer the region’s dry climate for health reasons. Denver provides a less extreme alternative to hotter dry places such as Texas and Arizona.
The health of a city’s real estate market is intimately connected to the overall condition of the economy. Denver is frequently noted for its growing tech sector. A recent report revealed that 15.5 million square feet of office space is used by tech companies, spread out over neighborhoods such as Greater Downtown, LoDo (Lower Downtown), RiNo (River North Art District), and others. It’s not only computer and tech firms, however, that are moving to Denver. The Metro Denver Economic Development Corporation identifies nine industry clusters that are driving economic growth in Denver:
- Beverage Production
- Broadcasting & Telecom
- Financial Services
- Healthcare & Wellness
This list indicates just how diverse Denver’s economy is and indicates that the city doesn’t dependent on the strength of a single industry. While IT is leading in job growth, beverage production had the highest job growth from 2011 and 2016 while rocket scientists had the highest incomes. This suggests that the strength of the city’s economy isn’t dependent on a singular industry but is extremely multifaceted.
One reliable sign that a city is growing is a steady growth in construction. Denver has been growing steadily over the last few decades. Recent years, however, have seen a rapid increase in this growth. The high visibility of cranes in Denver and its suburbs is a clear indication of this trend. Both commercial and residential construction is strong. The two, of course, are closely related as commercial growth brings more jobs to the area.
Why People Move to Denver: It’s Not Just the Economy
Denver is one of the most mobile areas in the country. The Denver Post reports that people who live in Colorado move more than residents of any other state. Some of these people arrive from other states while others move from one county to another within Colorado. While some people move to other parts of the state, Denver is the largest and best-known part of Colorado so it accounts for a large portion of moves. Denver is one of the ten fastest-growing cities in America. The city is especially attractive to millennials and professionals. Many retirees are also migrating to Denver, drawn by the climate and cultural attractions.
There are many reasons to move to Denver. As noted, jobs and economic growth are extremely appealing. However, that’s far from the only reason people are flocking to buy homes and find rentals in this area. U.S. News rated Denver at #2 in its 2017 Best Places to Live. Here are some of the leading features that make the Mile High City so desirable.
- Climate – While Denver doesn’t have beaches or tropical weather, it does average 300 days of sunshine per year. Many people also appreciate its dry climate, making Denver a less scorching alternative to Arizona and Texas.
- Proximity to Nature – It’s hard to beat the natural beauty of the Rocky Mountains. No matter where you are in Denver or its suburbs, you’re almost certainly within 30 minutes of spectacular scenery. And even in the city you always have great views. Going hand-in-hand with the surroundings is the healthy and outdoor-oriented lifestyle of many residents. People who enjoy hiking, biking, rock climbing, camping, and other outdoor activities have an incredible number of choices in Denver.
- The Green Rush – Marijuana legalization is a controversial issue and some Colorado residents consider it a negative rather than a benefit. However, it’s undeniable that some people are coming to the state because of legalization, and it is growing industry and creating jobs.
- Dining, Entertainment, and Culture – Denver has become a truly world-class city in the last few years with museums, fine dining, craft beers, performance spaces, art galleries, and lots of other cultural attractions. The River North Arts District (RiNo), for example, is always adding new projects and exhibitions, such as a six-block mixed use arts project which combines residential housing, office space, and a variety of art spaces. Innovative projects like this contribute to the city’s rising reputation as a first-rate cultural destination.
These are some of the reasons that, when combined with the vibrant economy, lots of people are moving to Denver.
The Future of Denver Real Estate
It’s always tricky to predict the future of markets. Real estate, in particular, is hard to predict as unforeseeable events or trends can always come along and cause unexpected changes. There are, however, some good reasons that the upward trend of Denver real estate is likely to continue for some time. The bustling economy, climate, cultural attractions, and natural beauty are an unusual combination of benefits that suggest a bright future. Many analysts predict that, at least for the next few years, the prices of Denver real estate will rise further.
Rising home prices and rents aren’t typically seen as good news for prospective homebuyers and tenants. The fact is, however, that Denver still has plenty of room to grow. Even as prices steadily rise, Denver is still significantly cheaper than cities such as New York, Los Angeles, San Francisco, Washington, DC, and Miami. This means that for people who want to move to a growing and culturally vibrant city, Denver still offers excellent value.
I’m a Denver native and real estate broker who can help you buy or sell your home: contact me to start a conversation.