The Denver, CO real estate market is booming with many buyers looking to purchase real estate in this popular city. According to recent data, the Denver median home price is approximately $580,000.
If you're thinking of investing in the Denver housing market, there are a few key things to know.
Here are three things that you should know before becoming an investor in Denver real estate.
1. Prices Remain High
Overall, prices in the Denver housing market are still high, sitting at approximately 46 percent higher than they were five years ago. To put things into perspective, the Denver median home price in 2017 was just around $399,000.
Home prices in Denver reached a peak in 2022 with sales averaging around $615,000. And while they're inching lower now, they remain at a five-year high. Regardless, the average time market is still sitting at about 18 days, which means that there is plenty of demand.
In just one year, the average sales price increased by approximately $100,000. If you're looking at investing in the real estate market here, it's important to be aware of what you'll likely pay.
2. The Real Estate Market May Slow
This fact applies to Denver, but it also applies nationwide. Home loan rates are reaching highs that haven't been seen in decades. The Federal Reserve has raised interest rates 10 times over the last year, making it more difficult for many Americans to secure financing.
A 30-year fixed mortgage rate is sitting at around 7 to almost 8 percent. Coupled with inflation, that means that the buyer pool right now is much smaller than it was just a year or two ago.
Regardless of the data, there are still people looking to buy into the Denver housing market. As an investor, it's important to be patient and keep a close watch on both home prices and loan interest rates. And, if the right opportunity comes up, then that's the time to swoop in.
3. Rental Demand is High
Higher home prices and interest rates mean the Denver real estate market is cooling. However, the Denver rental market is still as strong as ever.
If you're pondering making Denver investments, it's crucial to choose a property that will provide you with a good return. Consider looking at the most popular neighborhoods which include Capitol Hill, University Park, Sloan's Lake, and others.
As it stands, the average cost to rent a one-bedroom in Denver is well over $2,000. Over half of all rental properties are currently receiving this amount per month or higher. If you can find a great piece of property for a great price, you can expect to make a decent profit over time with a reliable tenant.
Make Your Move
If you're thinking of investing in the real estate market in Denver, remember these important facts. While demand remains high, so do asking prices and interest rates.
Do you need someone to help with the management of your rental and investment properties? If so, be sure to contact the team at PMI Elevation today to find out how we can help.