Anyone who lives in Denver or has visited the area recently has likely noticed that the city and its surrounding communities are in the middle of a dramatic change.
What was once a rugged Midwest town has become a hub of culture and creativity…and those who have invested in local real estate are reaping the benefits.
A recent article written by Scott Trench at BiggerPockets.com broke down some of the many reasons that the real estate market in Denver is absolutely exploding. It also detailed some of the reasons that many local experts are expecting that trend to continue through 2016 and beyond.
Trench’s article cited a BiggerPockets.com study that reported residential real estate prices increasing by 13.4% from the beginning of 2014 through the middle of 2015. He then explained that adding the average rent to those properties brought the gross return on those properties to 18.9%.
Considering banks are offering virtually 0% interest and the S&P 500 returned a little over 12% during that time, the combination of safety and profitability available in the Denver market is truly remarkable.
Imagine if someone told you at the beginning of 2014 that investing in Denver real estate would offer the safety of putting your money in the bank, while also providing the upside that outperforms the risky stock market!
The New Construction
Trench also pointed out that this trend is likely to consider because the population is increasing at a greater rate than new housing starts, all while unemployment is decreasing. Anyone with a basic understanding of supply and demand can see that this is a perfect recipe for real estate prices to continue climbing higher and higher.
In addition to the almost 20,000 new housing starts expected for 2015, there has also been a dramatic increase in renovations throughout the Denver market. Both factors alone are contributing to the rising average home prices, but combined with the rising population we can expect those increases to maintain their current velocity, if not increase it.
The Popular Option
Why is it that so many people are interested in moving to the Denver area? If you haven’t visited lately, you should make a point to come see for yourself!
Denver is evolving at a faster rate than most major cities. People who live here absolutely love the area. People who visit here want to stay. And many major corporations feel the same way.
The dramatic increase in people choosing to live in Denver is leading to more and more development in downtown Denver, gentrification in some of the area’s most historic neighborhoods, and increasing popularity for many of the surrounding areas like Boulder.
The Future Looks Bright
If you have invested in real estate in the Denver area in recent years, you have likely done very well on those investments. And if you have yet to consider this area, it looks like you might not be late to the party just yet!
Between all of the people who are choosing to live in Denver, the area’s current track record of rising property values, and the reasonable expectations for those values to continue increasing, Denver appears to be an absolutely ideal location for real estate investors in 2016 and beyond.
If you are looking to purchase either a home or investment property in Denver, CO feel free to call your local Carrington Real Estate Agent!