Relocation to Denver continues to hold-up our real estate prices.
Often, buyers will ask me if home prices in Denver will start to decline anytime soon. My answer is always the same. That’s not likely unless people stop moving to Denver more than they leave. Denver relocation is mostly responsible for steady to increasing Denver home prices.
So, as long as folks keep relocating to Denver, home prices are likely to hold steady or continue to increase. But, the rate of increase in most Denver neighborhoods is slowing down.
These are facts about the Denver real estate market.
Number Denver Real Estate Listings Holds Steady
Number of exisitng homes for sale is at the year’s lowest point. That’s about 3000 homes for sale now.
The supply of homes for sale is following the same pattern as last year.
Supply of existing homes for sale in the Denver Metro real estate market is about the same as it was a year ago. That’s about 3000 single family homes for sale in the six county Metro real estate market. Notice that we have not included Boulder County because of the unusually high demand for homes there.
The supply pattern continues to show more listings for sale in the spring months and fewer homes for sale in late fall and winter. Because, home sellers want to capitalize on the higher buyer demand from early spring to the Fourth of July.
Why People Keep Relocating To Denver?
Most Denver relocations come from California.
The answer is pretty simple really. They are moving here for jobs. In October, the metro Denver unemployment rate hit an historic low of 2.6%. We’ve enjoyed a low unemployment rate for most of the last decade.
But, this new rate is the lowest since 1976! So, everyone moving to Denver is virtually assured to get job if they want one. Millennials can also find plentiful employment. So, lots of Denver apartments have been built to accommodate the demand for rentals.
What Could Change in 2020?
Look for mortgage interest rates to continue to creep up. While the Federal Reserve Board as pledged to keep short term rates constant, longer term rates are still likely to increase slightly according to most experts.
Home sales are laggin last year’s sales by about 10%. But, absorbsion of homes is still around 1 month.
The only other wild card could be that the number of sales continues to decline. Denver home sales for the last two months have lagged 2018 by a little more than 10%. But, when a Denver relocation buyer moves here for employment, they have to live somewhere. So, most will still choose to buy a home from the limited inventory of new or existing homes for sale.
Home prices are likely to be held-up by Denver relocation buyers continuing to move here in 2020. Of course, if a major catastrophe occurs, all that could change. But, the consensus is that interest rates and Denver home price will hold steady to increase slightly.
The bottom line is that Denver homes are not likely to decline anytime soon. The lesson for buyers continues to be to buy now for less. Tomorrow home prices and interest rates are more likely to a little higher.
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