Denver Housing Market Hurt by Too Few Listings
Thanks to a strengthening economy, the housing market in many cities across the country is experiencing a major boom. Among the top cities is Denver, Colorado, which is a gorgeous place to live. In addition to a backdrop that consists of the snow-capped Rocky Mountains are thriving businesses and incredible job growth. Denver is home to Edward Jones, FirstBank, T-Mobile, Oppenheimer Funds, The WhiteWave Foods Company, DIRECTV, Whole Foods Market, Fed-X, and many others.
For many cities, there is a vast inventory of available houses. After all, millions of homes have gone into foreclosure or sold via a short-sell, giving homebuyers lots of different options. However, in the case of Denver, things are different. In this city, there are plenty of buyers but not enough houses to go around.
Changes in the Denver Housing Market
From 2013 to 2014, there was only a slight one percent improvement in the sale of single-family homes and condominiums. Then by year-end, sales really ramped up, which for the upcoming spring month could very well pose a problem.
As stated by one professional realtor in the Denver area, even during the winter, the housing market in this city is extremely competitive. For Denver, it is highly unusual not to see an increase in housing inventory since the number of sales is typically low. However, specific to springtime inventory, high demand for homes will need to be offset by a significant jump in listings.
Last year, the median sale price of homes in Denver was $274,900, which compared to 2013 was 8.2 percent higher. By December 31, 2014, the number of active listing was just over 5,300, the lowest number of available homes in more than 10 years.
Main Reason for Low Inventory
The primary reason for growing demand in the Denver housing market is that more and more companies are basing corporate regional headquarters there. In fact, in the most recent ranking report provided by Forbes, Denver is listed as number four among the top 10 fastest-growing metropolitan areas in the country.
To determine this status, different cities were rated in specific categories. For instance, for the share of homes still on the market for sale after being listed for a minimum of two months in mid-April 2014, Denver was at 38 percent and for 2013, at 47 percent. In addition, asking prices year-over-year change as of March last year, Denver was 9.6 percent.
In recent years, many high-powered corporations have moved to the Denver area to include Charles Schwab. Its regional campus will bring roughly 4,000 new jobs to the area. Other companies that have announced upcoming moves are Trulia and Keurig, among others.
The bottom line is that there are more people moving to Denver and surrounding areas than there are houses to accommodate. In addition to a lack of current inventory, developers are unable to keep up with growing demand. Of the homes that have been under construction, the challenge is that most are more rural, making driving distances too far.