Denver’s Housing Market Remains Strong, but 2017 Brings Its Own Influences
A recap of Vectra's first quarter Homebuilders Breakfast 2017.
Denver has a robust job market, boasts one of the lowest unemployment rates in the country and continues to be a hotspot for newcomers, all factors that fuel a healthy housing market.
John Covert, director of the Denver region at Metrostudy , shared his 2017 forecast for Denver's housing market during Vectra's quarterly Homebuilder Breakfast.
Last year was Denver's fifth consecutive year of double-digit increases in housing starts, with the past four years averaging an 18 percent annual increase. The Denver market saw 11,038 new home starts in 2016 and the highest level of starts since Q2 2007.
While the strong economic growth and housing demand will continue to influence the market in 2017, high home prices, low housing inventory, very little condo development, tight lot supplies and rising construction and development costs will impact Denver's housing market.
Covert said to watch for products with base prices below $400k to increase and large lot sizes and floor plans to decrease. While this activity might drop home prices, the price per square foot will increase.
According to a Metrostudy quarterly update from Covert, as mortgage rates rise and purchasing power declines, builders prepare to introduce new, more affordable product lines to accommodate the growing first–time and entry–level buyer segments. Smaller homes on smaller lots with design elements that appeal to these potential buyers will soon be available in many new communities throughout Denver.
In addition to smaller home sizes, keep an eye on the rapidly growing market in Denver's Metro North. While Denver's home growth is at 20 percent, Adams County's growth is close behind at 19 percent. The accessibility to northern Colorado, Boulder, Interlocken and downtown Denver is one of the many reasons Thornton's average home price has increased to $488k.
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