Colorado Fall Housing Outlook
Few areas of the country currently have a stronger real estate market than Colorado.
Few areas of the country currently have a stronger real estate market than Colorado. Early in 2015, home values rose as people flocked to The Centennial State. Entering the final quarter of the year, both potential buyers and sellers are interested to see if the market's strength is sustainable heading into 2016.
The early projections show the fall housing outlook for the state is strong. People are continuing to snatch up property in Denver and its suburbs quickly, leading to significant home price appreciation. That is good news for sellers, but creates an affordability issue for those who want to move into the area.
The state's largest cities are setting the pace for all of Colorado. In July, Denver home prices had the second-largest gain in the entire U.S., according to the most recent Standard & Poor's/Case-Shiller Price Indices. Home prices in Denver rose 10.3 percent over the year before, trailing only San Francisco for the largest year over year gain among the 20 largest markets in the U.S.
In Colorado Springs, sales are also strong . Through the first eight months of the year, there were more than 9,000 property sales, a nearly 25 percent increase over the same time period of 2014, the Colorado Springs Gazette reported.
Not enough housing for all who want it
The biggest issue facing the Colorado real estate market this fall is a level of demand that outweighs supply. Prices are continuing to rise, as more and more people are trying to move into the state. That is a concern for people who don't have the income or savings account to afford the growing homeownership costs.
Many of those increased sales have to do with inventory, or a lack thereof. A July 30 report from Zillow stated there were 16.6 percent fewer homes on the Denver real estate market in the second quarter of 2015 than there had been in 2014. That is despite home values going up 15.4 percent, to an average of more than $300,000.
When just looking at the lowest-valued homes that would be affordable to the most people, the report found there were 38.7 percent fewer properties on the market this year than there had been in 2014.
Denver is not the only place where the demand vastly outweighs the supply of housing. The Home Buying Institute also reported there was a shortage of housing in Boulder and Colorado Springs, leading to increased costs in those markets as well. The Colorado Association of Realtors reported single-family home sales decreased in August, with low inventory being the main cause of that decline.
What the future holds
Colorado real estate experts are optimistic that property sales will continue to be strong in the fourth quarter of the year. There is still a great demand to own property within the state, and prices remain high.
While sales will still be good, there will be a bit of a setback, because of the time on the calendar. Home sales historically slow down at the end of the year, and because things have been so strong in Colorado thus far in 2015, it is natural to expect a slight decline in sales as the year comes to a close.
Even if the end of the year isn't as strong as the first nine months, there will be momentum coming out of the fourth quarter. The average home price is expected to rise by 4 percent in 2016, according to Colorado Home and Style, meaning the strong market in the state should continue.
Those interested in potentially buying new a new home or making home improvements to property they already own should contact a professional at Vectra Bank to learn more about loans and credit programs.