Denver Housing Market Q2 Update
A recap of Vectra's second quarter Homebuilders Breakfast 2017.
The Denver housing market remains strong, fueled by continued job growth and an unemployment rate of only 2 percent, the lowest in the country as of May 2017.
John Covert, director of the Denver metro region at Metrostudy , shared his Q2 market update at Vectra Bank's recent quarterly Homebuilders Breakfast.
While new home starts continue to rise, they are doing so at a declining rate due primarily to a lack of open space for building. The largest area of growth, at 41 percent, is along the DIA corridor. This area has space to expand, and the infrastructure in place for easy connection via nearby highways, light rail and the airport.
Another area of town seeing significant growth, particularly in new townhomes and duplexes, is around the Highlands and Sloan Lake neighborhoods. There has been a 356 percent increase in quarterly townhome starts in this area since Q2 of 2016. However, most of these townhomes remain in a more expensive price range, with a $510k average price.
With the average new home price in Denver being $534k, many builders are now focusing on building smaller homes with a lower price point to appeal to first-time buyers. However, it is very difficult to build a new home for less than $350k. The most ideal solution for first-time buyers could be in new condos, but they are just not being built at this time.
High home prices are good news for the resale market, however. There was a 4 percent increase in annual listings and a 3 percent increase in sales in the trailing 12 months, with a strong price appreciation.
Perhaps the most interesting thing that John spoke about was the changing homebuilding industry. While we have not seen much change here in the U.S. over the past 70 years, companies like Sekisui Homes in Japan are revolutionizing homebuilding. New homes are built in fully automated factories with no human involvement. Could this be the future of homebuilding here as well?
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