Every so often, we take a look at Denver’s cost of living and update our need-to-knows for those relocating to sunny Colorado. Whether you are renting or looking to purchase a home in the Greater Denver area, this post is for you. If you are searching for additional resources about moving to Colorado or what neighborhood best suits you, visit BWB’s Moving to Denver section on our blog.
All it takes is a quick Google search to reveal just how desirable Colorado has become over the last 20 years. Since 2010, Colorado’s population has grown so much it equates to adding another city with a bigger population than Denver to the state. According to the US Census, the Centennial State is 7th in fastest growing areas in the US.
This year, active listings increased 35% in April over March, the largest increase between those two months on record. However, there were still only 2,594 single family homes for sale at the end of April, compared to the historic average of 14,929. So what factors are influencing this squeeze on buyers that is making Denver the fastest moving market in the country?
Rush To The Finish Line
Thinking about buying a house in Colorado? Beyond the basic need-to-knows, brace yourself for high competition and a rapidly moving market. In popular tech hub cities like San Francisco, Chicago, and New York, $800,000-$1,000,000 buys you a shoebox of a home. Families come to Colorado from out of state, and are thrilled to pay those prices to get more for their dollar. This phenomenon draws people to Colorado’s larger lots, sprawling neighborhoods, and open spaces here in CO. Home sizes are just one of the reasons Colorado’s hot housing market hasn’t taken a breather in years.
Comparatively, locals and young families that are starting to search for their first homes are being kept up at night by the astronomical prices. At 24.20% higher than last April, Denver-area homes had an average closing price of $623,825 last month as appreciation continues to favor sellers over buyers.
Demand is a big issue here, however, it is not the only factor pushing prices sky high. As compared to the previous real estate peak in 2006, Denver home prices are 49% above that peak (adjusted for inflation.) So what is driving prices? The long and short of it is that the pandemic changed how people are thinking about housing, moving, and work life in general. Workers have started to realize the significant, long-term changes in work from home and how that will open up opportunities for relocating or buying a second home.
No Signs Of Slowing Down (Yet)
That being said, while the pandemic and low mortgage interest rates have enticed potential home buyers to wade into the market, the supply of homes for sale continues to decline. When we wrote about buying a home during a pandemic last summer, some of the outcomes we are seeing now were not immediately obvious.
For example, while buyers were eager to change things up, sellers postponed putting their homes on the market. Also, adjusted forbearance options allowed those who may have moved to stay in their homes longer. As the economy re-opens and more people are getting vaccinated, experts also predict there will be more homes for sale, evening out the price ranges we are seeing right now by this winter.
Deputy chief economist for CoreLogic, Selma Hepp, suggests that affordability challenges for many potential home buyers will eventually slow home price appreciation levels. On top of that, she notes that an increase in mortgage rates will further push the budgets of young families and reduce buyer competition.
In May 2021, the Denver Metro Association of Realtors’ (DMAR) reported that the average home was snapped up in just 13 days. Imagine you are searching for you dream home during a lush Colorado spring and someone says to you, “hey, you now have to search and put down an offer 38% faster than you would have last month.” Noting the break-neck pace, Westword quoted the Home Buying Institute saying that “the Denver, Colorado real estate market has officially entered turbo mode.” The following graphics represent the median home pricing by county from 2016-2021, followed by the median home price in Denver in March 2021.
What If I’m Just Looking To Rent In Colorado?
If you’re a renter here in Denver, we have not forgotten you. As much as we would like to report prices are down and hugely affordable here in Denver, that is not exactly the case. In the last five years, rent prices have also seen a gradual boost. According to Zumper, a housing search site, the average rent for a one-bedroom apartment in Denver is $1,435/month, a 1% increase from the previous year. Rentcafé lists a slightly higher average at $1,670 for monthly rent.
If you’re aiming to live downtown, near Capitol Hill or Cherry Creek, or anywhere closer to the urban action, expect to pay a high sticker price for those areas. LoDo, Uptown, and Five Points are some of the most expensive rental areas, with an average closer to $2,000/month for a one-bedroom unit. If you’re willing to share, finding a few roommates can alleviate costs and make those areas more affordable.
Before you say we are biased about how great it is to live here, we know we are. Colorado is an incredibly special place. While more people are realizing that and trying to get their piece, we may finally see a cooling of home prices going into early 2022. Get more specific numbers on the cost of utilities, food, and other information in this article on moving to CO.
At the end of the day, part of the reason Colorado has held its footing in the national market is due to the combination of perks versus costs. Colorado is still cheaper than San Francisco, and boasts an unending list of outdoor activities, vacation spots, and a (happily) returning live music scene. From new-age eateries to long-standing cultural institutions (and new, anyone else excited for Meow Wolf?), Denver really has the best of everything.
Here at BWBacon Group, we know and live what you are experiencing as anemployerorjob seekerin Denver, Boulder, Dallas, San Francisco, New York City or any of the other cities we work in. We believe great recruiting starts and ends with understanding people.
If you have any questions about living, working or playing any of the areas we serve, pleasecontact us.We are happy to help. Seize the day, every day, that’s what we say!